WINSTAR COMMUNICATIONS INC
S-3, 1999-08-31
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)
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<PAGE>

     As filed with the Securities and Exchange Commission on August 31, 1999
                                                       Registration No. 333-
- --------------------------------------------------------------------------------



                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                          -----------------------------
                       REGISTRATION STATEMENT ON FORM S-3
                                    UNDER THE
                             SECURITIES ACT OF 1933
                          -----------------------------

                          WINSTAR COMMUNICATIONS, INC.
             (Exact Name of Registrant as Specified in its Charter)

<TABLE>
<CAPTION>

<S>                                             <C>                                          <C>
         Delaware                                        4812                                      13-3585278
(State or other jurisdiction of                 (Primary standard industrial                   (I.R.S. Employer
incorporation or organization)                  classification code number)                  Identification Number)
</TABLE>

                                 230 Park Avenue
                            New York, New York 10169
                                 (212) 584-4000

      (Address, including zip code, and telephone number, including area code,
of registrant's principal executive office)

                          -----------------------------
                                Timothy R. Graham
                  Executive Vice President and General Counsel
                          WinStar Communications, Inc.
                                 230 Park Avenue
                            New York, New York 10169
                                 (212) 584-4000
 (Name, address, including zip code, and telephone number, including area code,
of agent for service)

                          -----------------------------
                                   Copies to:

                             David Alan Miller, Esq.
                            Graubard Mollen & Miller
                                600 Third Avenue
                            New York, New York 10016
                            Telephone: (212) 818-8800
                               Fax: (212) 818-8881

         Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective.

         If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /

         If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. /X/

         If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /

         If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /

         If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /

- --------------------------------------------------------------------------------

<PAGE>


                         CALCULATION OF REGISTRATION FEE



<TABLE>
<CAPTION>
                                                              Proposed Maximum             Proposed Maximum
       Title of Security              Amount to be            Aggregate Price                  Aggregate               Amount of
        to be Registered               Registered                Per Share                  Offering Price          Registration Fee
        ----------------               ----------                ---------                  --------------          ----------------
<S>                               <C>                         <C>                          <C>                      <C>

Series F 7 1/4% Cumulative
Convertible Preferred Stock          300,000 shares                 (1)                           (1)                      (1)
("Preferred Stock")

Common Stock, par value $.01
per share underlying Preferred     4,900,000 shares(2)            $61.96(3)                  $303,604,000.00             $84,401.91
Stock

Common Stock to be resold by         296,727 shares               $51.97(4)                   $15,420,902.19              $4,287.01
certain persons

         Total                                                                                                           $88,688.92
</TABLE>



(1)      Filing fee being paid with respect to underlying shares of Common
         Stock.

(2)      Pursuant to Rule 416(b) promulgated under the Securities Act of 1933,
         as amended (the "Act"), this Registration Statement also covers a
         presently indeterminable number of additional shares of Common Stock
         which may be issued in lieu of cash dividends during the term of the
         Preferred Stock ("Dividend Shares"). Pursuant to Rule 416, this
         Registration Statement also covers a presently indeterminable number of
         additional shares of Common Stock issuable by the Company in the event
         the Preferred Stock is converted in connection with a change of control
         of the Company.

(3)      Represents the conversion price ($61.96) for a share of Common Stock.

(4)      Based on the average of the high and low prices of a share of Common
         Stock as reported by Nasdaq on August 25, 1999, based on Rule 457(c).


         The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
<PAGE>


                 Preliminary Prospectus dated August 31, 1999
                              Subject to Completion


                          WINSTAR COMMUNICATIONS, INC.

                            -------------------------


 300,000 Shares of Series F 7 1/4% Senior Cumulative Convertible Preferred Stock
                  (Liquidation Preference of $1,000 Per Share)
                     and 5,196,727 shares of Common Stock


         This prospectus covers the sale by certain persons from time to time of
an aggregate of 300,000 shares of our outstanding Series F 7 1/4% Senior
Cumulative Convertible Preferred Stock. Our Series F preferred stock:

         o        has a per-share liquidation preference of $1,000;
         o        is redeemable at our option commencing June 24, 2002;
         o        pays an annual dividend per share of $72.50, which will be
                  paid by us through the issuance of shares of our common stock.
                  We are required to pay the dividend through the issuance of
                  these dividend shares until our currently outstanding
                  indebtedness has been repaid, after which time we may pay
                  these dividends in common stock or in cash, at our election;
         o        is convertible, at the option of the holders, into shares of
                  our common stock. We will issue 16.13912 of these conversion
                  shares for each share of Series F preferred stock converted,
                  which represents a conversion price of approximately $61.96
                  per share; and
         o        is convertible, at our option, into shares of our common stock
                  on the same basis as above, under certain circumstances
                  commencing June 24, 2002.

         This prospectus also covers:



         o        the sale by holders of an indeterminable number of shares of
                  common stock that may be issued in lieu of cash dividends on
                  the Series F preferred stock;

         o        our issuance of up to approximately 4,900,000 conversion
                  shares to holders of Series F preferred stock upon conversion
                  of the Series F preferred stock; and


         o        the resale by holders of an aggregate of 296,727 shares of
                  our common stock that we previously issued in connection with
                  various transactions.


         Our Series F preferred stock is eligible for trading in The Portal
(ServiceMark) Market, a subsidiary of The Nasdaq Stock Market, Inc. Our common
stock is traded on the Nasdaq National Market under the symbol "WCII." The last
sale price of our common stock on the Nasdaq National Market on August 25, 1999
was $53.00 per share.

         We will not receive any cash proceeds from the sale of any securities
by any person under this prospectus or from our issuance of any conversion
shares. We will bear all costs, expenses and fees in connection with the
registration of the securities offered by this prospectus. Such expenses are
estimated to be approximately $388,688.92.

   See "Risk Factors" beginning on page 13 of this prospectus for information
              that should be considered by prospective investors.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

The information in this prospectus is not complete and may be changed. No holder
may sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.

                The date of this prospectus is              , 1999
<PAGE>

                                TABLE OF CONTENTS



                                                                   Page
                                                                   ----

FORWARD-LOOKING STATEMENTS.........................................  2
WHERE YOU CAN FIND MORE INFORMATION................................  3
SUMMARY............................................................  4
RISK FACTORS....................................................... 13
PRICE RANGE OF COMMON STOCK........................................ 26
DIVIDEND POLICY.................................................... 26
CAPITALIZATION..................................................... 27
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS............ 28
DESCRIPTION OF THE SERIES F PREFERRED STOCK........................ 37
DESCRIPTION OF CERTAIN INDEBTEDNESS AND CAPITAL STOCK.............. 54
SELLING AND PLAN OF DISTRIBUTION .................................. 63
LEGAL MATTERS...................................................... 67
EXPERTS............................................................ 67
UNAUDITED PRO FORMA CONDENSED
  CONSOLIDATED FINANCIAL STATEMENTS............................... F-1


                           FORWARD-LOOKING STATEMENTS

         This prospectus contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 with respect to our
financial condition, results of operations and business. The words "anticipate,"
"believe," "estimate," "expect," "plan," "intend," "predict," "project," "will,"
"could" and similar terms and expressions, as they relate to us, are intended to
identify forward-looking statements. These statements reflect our current views
with respect to future events and are subject to numerous risks, uncertainties
and assumptions. We cannot assure you that any of our expectations will be
realized. Factors that may cause actual results to differ materially from those
contemplated by forward-looking statements include, without limitation:

         o        our ability to service our debt or to obtain financing for the
                  buildout of our domestic and international telecommunications
                  networks;

         o        our ability to attract and retain a sufficient
                  revenue-generating customer base;

         o        competitive pressures in the telecommunications and technology
                  industries;

         o        general economic conditions; and

         o        the other risks described in this prospectus under the caption
                  "Risk Factors."

         We do not undertake to update our forward-looking statements or risk
factors to reflect future events or circumstances.

                                        2
<PAGE>

                       WHERE YOU CAN FIND MORE INFORMATION


         We have filed a registration statement on Form S-3 under the Securities
Act of 1933, as amended, with the Securities and Exchange Commission ("SEC").
This prospectus is part of that registration statement and does not contain all
of the information included in the registration statement. For further
information about us and our securities you may refer to the registration
statement and its exhibits and schedules as well as the documents described
below. You can review and copy these documents at the public reference
facilities maintained by the SEC or on the SEC's website as described below.


         We also file annual, quarterly and special reports, proxy statements
and other information with the SEC. Our SEC filings are available to the public
over the Internet at the SEC's web site at http://www.sec.gov. You may also read
and copy any document we file at the SEC's public reference room at 450 Fifth
Street, N.W., Washington, D.C. 20549. These documents are also available at the
public reference rooms at the SEC's regional offices in New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available at the offices
of the Nasdaq National Market in Washington, D.C.

         The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. This
prospectus incorporates by reference our documents listed below and any future
filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934:

         o        Annual Report on Form 10-K (as amended) for the year ended
                  December 31, 1998;

         o        Quarterly Report on Form 10-Q for the quarter ended March 31,
                  1999;

         o        Quarterly Report on Form 10-Q for the quarter ended June 30,
                  1999;

         o        Proxy Statement regarding the Annual Meeting of Stockholders
                  held on July 1, 1999, filed May 7, 1999;

         o        Current Report on Form 8-K, filed June 3, 1999;

         o        Current Report on Form 8-K, filed June 24, 1999;


         o       Current Report on Form 8-K, filed July 16, 1999; and


         o        The description of our common stock contained in our
                  registration statement on Form 8-A (as amended) under the
                  Exchange Act (File No. 1-10726).

         We will provide any person to whom a prospectus is delivered a copy of
any and all of the documents incorporated in this prospectus by reference upon
their written or oral request. If you desire any of these documents, please
contact us as at WinStar Communications, Inc., 230 Park Avenue, New York, New
York, 10169, Attention: Investor Relations, 212-584-4000.

                                        3
<PAGE>

                                     SUMMARY

         This summary is qualified in its entirety by the detailed information
and financial statements (and notes thereto) incorporated by reference into this
prospectus. Unless otherwise stated in this prospectus, references to "we,"
"us," "our" or "WinStar" refer to WinStar Communications, Inc. and, where
appropriate, our subsidiaries. Wireless Fiber(ServiceMark) and
Office.com(ServiceMark) are service marks, and WinStar(Registered), WinStar for
Business(TradeMark) and WinStar Business Info Center(TradeMark) are trademarks,
of WinStar.

General

         WinStar is a facilities-based provider of telecommunications services
primarily to businesses in a growing number of major markets throughout the
United States. Through our local broadband (i.e., high-capacity) networks, we
offer our customers a variety of individual and bundled services, including
local and long distance voice services, high-speed data transport, Internet
access and other enhanced communications services. We also provide
Internet-based information content and services, such as online business
resources. We provide our services with a high degree of customer care and at
competitive prices, which affords our customers an attractive alternative to the
incumbent local exchange carriers and other service providers. As of June 30,
1999, we had approximately 453,000 installed lines serving more than 16,000
business customers. We currently provide service in more than 30 major U.S.
markets, including Atlanta, Boston, Chicago, Dallas, Los Angeles, New York City,
San Diego, San Francisco and Washington, D.C. Revenues from our core
telecommunications services for the six months ended June 30, 1999 were $145.4
million compared to $51.1 million for the six months ended June 30, 1998.


         In order to take advantage of the benefits derived from early market
entry, in December 1998 we announced a plan to accelerate the growth of our
business by expanding into 60 U.S. markets by the end of 2000, rather than the
40 U.S. markets previously announced. Additionally, we are expanding
internationally and intend to enter into up to 50 foreign markets by the end of
2004. We intend to serve each of these markets primarily with our local
broadband network. Our strategic relationship with Lucent Technologies, Inc.
facilitates this expanded rollout. As part of this relationship, Lucent, under
our direction, is providing design, engineering and construction services for
the buildout of our local broadband networks in the United States and abroad.
Lucent also is making financing available for the purchase of up to $2.0 billion
of equipment and services necessary for this buildout, of which $500.0 million
was made immediately available. At June 30, 1999, we had borrowed $362.7
million under this financing arrangement.


         An integral part of our network buildout is the interconnection of our
local broadband networks in the United States with long-haul fiber to create a
national end-to-end broadband network. This seamless national network will
operate as a true broadband alternative to the existing public telephone
networks that are owned and controlled by the incumbent service providers. Our
national broadband network will enable us to carry a substantial portion of our
customers' voice, data and video transmissions, from point of origination to
point of termination. Since this network will reduce our reliance on the
facilities of other providers, we will be able to substantially reduce our costs
and have greater control over the quality of service we provide. In furtherance
of our plan to create such a national broadband network, in 1998 we purchased
25-

                                       4
<PAGE>

year indefeasible rights of use ("IRUs") to intracity and intercity fiber
facilities being constructed by Metromedia Fiber Network, Inc. and Williams
Communications, Inc. We are also integrating our existing national ATM backbone
and our network of frame relay data switches into this developing national
broadband network.

WinStar Local Broadband Networks

         Local telephone service historically has been carried by the incumbent
local exchange carriers across their "legacy" networks. The portion of these
legacy networks that ultimately connects to customer buildings, called the "last
mile," is typically copper wire. The rapid growth of bandwidth-intensive
communications services, such as Internet access and data transport, has created
a shortage of capacity across the last mile. We believe that this shortage will
become more acute as the use of bandwidth-intensive applications continues to
grow. Our local broadband networks offer a solution to this increasing need for
bandwidth to a larger addressable market than fiber or copper-based connections.

         An integral part of our local broadband networks is our wireless
transmission capability, which we call "Wireless Fiber." Our Wireless Fiber
services use the 38 GHz, 28 GHz and other portions of the radio spectrum to
carry voice, data and video transmissions. Our Wireless Fiber services can
provide fiber-quality transmission at speeds more than 350 times faster than
ISDN, the fastest service currently in general use on legacy networks. We
believe that in order to effectively use wireless spectrum for the commercial
provision of broadband communications services, a provider must have access to a
large amount of spectrum in each of the markets where it operates. We hold
licenses that provide us with the largest amount of 38 GHz radio spectrum in the
country, as well as a large amount of 28 GHz spectrum and other various spectrum
rights. Our spectrum holdings cover markets encompassing more than 200 million
people and more than 80% of the business market in the United States.

         We use our Wireless Fiber to establish connections between buildings in
which our customers are located and our hub site buildings. Transmissions are
carried between these locations using wireless connections between antennas
placed on the roof of each building. Accordingly, securing access rights for our
antennas is a crucial step in the construction or expansion of our local
broadband networks. Currently, we have access rights to more than 5,500
buildings. We select hub site buildings to maximize the number of customer
buildings which will have line of sight to the hub. Connections between our hub
sites and our switching facilities are made using fiber or, in some instances, a
second wireless link. Our switches seamlessly deliver voice, data and video
traffic to customers directly connected to our network, the public switched
telephone network or the Internet.

Business Strategy and Strengths

         Our goal is to create one of the first national broadband networks and
to drive a high volume of customer traffic across this network. We believe that
our Wireless Fiber and switch-based infrastructure provides us with significant
competitive advantages, particularly over service providers that rely on
wireline connection for the last mile. Our strategy, elements of which are set
forth below, is to exploit these advantages in order to attain our goal.

                                       5
<PAGE>

         Rapidly and Cost-effectively Deploy Our Local Infrastructure. We are
rapidly and cost-effectively deploying our local broadband networks to create a
first-to-market presence in our targeted buildings. Through this presence, we
seek to establish a strong customer base ahead of our competitors and to
cost-effectively grow our business as our markets mature. In pursuit of this
strategy, we are expanding the rollout of our services to 60 U.S. markets by the
end of 2000 and up to 50 foreign markets by the end of 2004. The following
factors enhance our deployment capabilities:

         o        we do not have to lay underground fiber to establish broadband
                  connections to customer buildings;

         o        we are a leader in securing the critical building access
                  rights necessary to build out broadband wireless networks;

         o        we are able to install a Wireless Fiber antenna and establish
                  a broadband last mile connection to a customer building within
                  a few days after obtaining building access;

         o        our technology is scalable and we can create wireless
                  broadband connectivity to a building at a fraction of the cost
                  of a fiber link;

         o        we can generally link capital expenditures directly to demand
                  by connecting a building to our network when it is ready to
                  generate revenue; and

         o        our strategic relationship with Lucent provides us with ready
                  access to equipment and services, qualified engineering and
                  installation personnel, and equipment financing.

         These advantages will be accentuated as we integrate point to
multipoint technology into our network infrastructure. We anticipate commercial
deployment of point to multipoint technology in the fourth quarter of 1999.
Point to multipoint technology adds another dimension to our ability to create
network capacity and presents significant advantages over network buildout using
only point to point technology, including:

         o        the reduction of capital expenditures because a single
                  hub-based multipoint antenna can simultaneously carry
                  transmissions to multiple customer buildings; and

         o        the more efficient management of our Wireless Fiber capacity
                  because multipoint technology allows us to allocate the same
                  spectrum among multiple customers to be used when required.

         Interconnect Local Networks to Create a National Broadband Network. We
are interconnecting our local broadband networks to create a national broadband
network in order to maximize the advantages afforded by our Wireless Fiber-based
infrastructure. Our IRUs with Williams and Metromedia Fiber will allow us to
complete the intercity and selected intracity portions of this national
broadband network on a rapid and cost-effective basis. In addition, our

                                       6
<PAGE>

strategic relationship with Lucent substantially enhances the speed at which we
can construct and expand our national network.

         Target Customers Located in "On-Net" Buildings. In the past, we entered
a new market by reselling the services of the incumbent providers to our
customers, intending to transfer these customers to our local broadband network
once deployed. Due to our growing size and scale, we recently decided to
intensify the focus of our sales and marketing efforts on customers located in
buildings connected to our local broadband networks (i.e., "On-Net"). We believe
these efforts will result in greater profitability as our local broadband
networks continue to expand and a greater percentage of our customers are
located in On-Net buildings. As part of this objective, we use unique marketing
strategies to expand our customer base. One such program was our recently
completed "Project Millennium," which was offered to businesses located in
approximately 1,000 buildings in 13 of our existing markets. Under Project
Millennium, first-time customers who signed a one-, two- or three-year service
contract received up to $1,000 per month of free local phone service during the
first one-third of the contract term. Based on the success of Project
Millennium, we recently initiated a second phase of this marketing strategy,
offering free long distance service (varying in amount corresponding to the type
and amount of other services purchased) to customers that sign a three-year
contract for local service prior to August 31, 1999. We also expanded this
marketing initiative to cover our comprehensive set of Internet services and now
offer 18 months of free Web hosting service from our state-of-the-art data
centers to customers who sign up for three years of dedicated Internet access
and hosting.

         Offer Attractive Pricing and Superior Customer Care. We strive to offer
our customers attractive pricing and service superior to that of other
telecommunications service providers. We believe our Wireless Fiber technology,
integrated service offerings, network management and customer support systems
enable us to offer such pricing and service. By carrying our customers' local
traffic over our Wireless Fiber, instead of the more costly facilities of the
incumbent local exchange carriers, we are able to provide our customers with
more attractive rates. We also tailor our services to the particular needs of
our customers through regular customer consultation. We monitor our network 24
hours a day through our new network operations center, allowing us to react
quickly to potential service problems and ensuring that we provide our customers
with reliable service. We also provide our customers with 24-hour-a-day access
to our new centrally-managed customer care and support center. In addition, we
are developing customer-centric operations support systems designed to allow us
to track ordering, provisioning, billing, servicing and other information for
each customer from a central point of access.

         Provide Integrated Voice and Data Telecommunications and Information
Services. We offer a full range of basic and enhanced voice and data services.
We believe that the customers we target typically prefer to purchase their voice
and data communications services together as a single package from a single
provider. We also believe that the ability to package business information,
entertainment and other content and services with telecommunications services
will become an increasingly important factor in the business customer's decision
to select or retain a telecommunications provider. Accordingly, we seek
opportunities to expand our information and content assets and services which we
believe will enhance the marketing of our telecommunications services and the
value we provide our customers.

                                       7
<PAGE>

Recent Developments

         We recently have experienced several important developments in the
rollout of our business. These developments are briefly described below.

         Introduction of OC-3 Services

         In June 1999, we launched OC-3 (155 Mbps) point-to-point service,
making us the first U.S. communications company to offer fixed wireless
broadband OC-3 service to its customers. This offering delivers ATM, SONET and
Fast Ethernet traffic using our Wireless Fiber services. This service is
designed to support high-capacity data, Internet and video applications, as well
as traditional voice services, and can be integrated into WANs, metropolitan
area networks and corporate campus environments, providing connectivity for
private networks.

         Conversion of $122.3 Million of Debt into Equity


         In June 1999, all of our 14% convertible senior subordinated discount
notes due in 2005 automatically converted into shares of our common stock (the
"Debt Conversion"). At the time of the Debt Conversion, these notes, which were
originally sold in October 1995, had an aggregate accreted value of
approximately $122.3 million. They converted into approximately 5.9 million
shares of our common stock at the fixed conversion rate of $20.625 per share. If
the notes had remained outstanding to maturity, they would have accreted to an
aggregate value of $147.1 million, which could have been converted into
approximately 7.1 million shares of common stock. The Debt Conversion
strengthens our balance sheet and reduces our interest expense.


         Syndication of Portion of Lucent Borrowings

         During the six months ended June 30, 1999, we incurred approximately
$285.2 million in indebtedness under our financing agreement with Lucent. As of
June 30, 1999, the total amount outstanding under the Lucent financing agreement
was approximately $362.7 million. Under the terms of this five year agreement,
Lucent will provide up to $2.0 billion to finance the purchase of equipment and
related services, not to exceed $500.0 million at any one time held by Lucent.
In July 1999, a commercial bank purchased from Lucent, for syndication, $350.0
million of WinStar's borrowings under the financing agreement, thereby creating
additional availability in such amount.

         Procurement of Accounts Receivable Financing


         In June 1999, we completed a $35.0 million accounts receivable
securitization financing arrangement. Under this financing, we may borrow up to
the lesser of the maximum amount of the facility (which has been initially set
at $25.0 million, increasing to $35.0 million when certain conditions are met)
and the amount determined under a borrowing base formula. Borrowings under this
facility will bear interest at the London Inter-Bank Offered Rate ("LIBOR"),
plus 1.5%. As of June 30, 1999, the Company had no outstanding balance under
this facility.


                                       8
<PAGE>

         Rollout of Initial International Services

         In February 1999, we completed the purchase of a 95% equity interest in
a company holding a license for 38 GHz spectrum in Argentina. The license
obtained through this purchase covers all of Argentina, including Buenos Aires,
which is one of Latin America's major business markets and the eighth largest
market outside the United States. We intend to initiate service in Buenos Aires
during the fourth quarter of 1999.

         In February 1999, KDD WinStar Corporation, a joint venture formed by
us, KDD Corporation and Sumitomo Corporation, was awarded a license for 38 GHz
spectrum in Japan. This license covers several cities, including Tokyo and
Osaka, the top two Japanese markets targeted by us. This award came at no cost
to the joint venture, of which we own 35%. In June 1999, KDD WinStar began to
offer businesses in Japan a wide range of competitively priced communications
services, including local and international frame relay, ATM, high-speed
Internet access and private line services. In addition, KDD WinStar has begun to
provide high-speed connectivity for an Internet service provider based in Tokyo.
KDD WinStar's services are being provided over a wireless broadband network,
utilizing 22 GHz and 38 GHz spectrum.

         In May 1999, we introduced our wireless broadband services in
Amsterdam, offering a wide range of competitively priced communications
services, including local and international frame relay, ATM, high speed
Internet access and private line services. These services are provided over our
wireless broadband network, utilizing 38 GHz spectrum.

         Office.com Venture with CBS

         In June 1999, we sold to CBS Corporation a 331/3% equity stake in
Office.com. Office.com is our branded Internet portal that provides small- and
medium-sized business users with access to an electronic community of other
small- and medium-sized businesses. Through Office.com, users will interact,
communicate and transact business with customers, colleagues, suppliers and
competitors. Users also will have access to a comprehensive source of business
information and content, as well as e-commerce and communications tools and
services.

         We launched the initial phase of Office.com in August 1998, supplying
editorial content and business tools to Yahoo! Small Business. The full-scale
launch of Office.com is scheduled for the fourth quarter of 1999.

         In exchange for its equity position, CBS will provide Office.com with
$42 million of promotion and advertising over a term of six years across the
full range of CBS' media properties, as well as those of its subsidiary,
Infinity Broadcasting Corporation. We also will be able to access the sales
force of CBS PLUS, the CBS cross-media sales group, in connection with the
promotion and marketing of Office.com.

         Sale of Series F Preferred Stock


         In June 1999, we consummated a private placement ("June 1999 Private
Placement") in which we sold 300,000 shares of our Series F preferred stock to
certain institutional investors for an aggregate purchase price of $300 million,
less customary discounts and expenses, for net


                                       9
<PAGE>


proceeds of approximately $290.9 million. These purchasers then resold all or a
portion of the Series F preferred stock to "qualified institutional buyers" in
reliance on Rule 144A under the Securities Act of 1933.


         In connection with the June 1999 Private Placement, we entered into a
registration rights agreement pursuant to which we are obligated to file the
registration statement of which this Prospectus forms a part, under the
Securities Act, registering the resale of the Series F preferred stock and
dividend shares and the issuance of the conversion shares. We agreed to use our
best efforts to have such registration statement declared effective on or prior
to November 15, 1999. If such registration statement is not declared effective
on or prior to November 15, 1999, the dividend rate on the Series F preferred
stock increases to 9 1/4% per annum until the default under the registration
rights agreement is cured.

Corporate Information

         WinStar was incorporated under the laws of the State of Delaware in
September 1990. Our principal office is located at 230 Park Avenue, New York,
New York 10169 and our telephone number is (212) 584-4000.


                                  Risk Factors

         See "Risk Factors" commencing on page 13 hereof for a discussion of
certain risks that should be considered in connection with an investment in our
Series F preferred stock and our common stock.

                                       10
<PAGE>

                          Summary Financial Information

         The summary historical financial data presented below for the years
ended December 31, 1996, 1997 and 1998 have been derived from our audited
consolidated financial statements incorporated by reference into this
Prospectus. The summary historical financial data for the six months ended June
30, 1998 and 1999 have been derived from our unaudited condensed consolidated
financial statements incorporated by reference into this Prospectus. In our
opinion, the unaudited condensed consolidated financial statements have been
prepared on the same basis as the audited consolidated financial statements and
include all adjustments, which consist of only normal recurring accrual
adjustments, necessary for a fair presentation of the results of operations for
the periods presented. The summary as adjusted data presented below for the year
ended December 31, 1998 ^ and for the six months ended June 30, 1999 have been
derived from the unaudited pro forma condensed consolidated financial statements
included elsewhere in this Prospectus. The pro forma adjustments are based upon
available information and certain assumptions that we believe are reasonable.
The pro forma financial statements and summary data do not purport to represent
what our results of operations would actually have been had the March 1998
Financing Transactions (as defined) and the June 1999 Private Placement in fact
occurred on the dates discussed in footnotes (a) through (c) below, or to
project our results of operations or financial condition for any future period
or date. The financial data below should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," the unaudited pro forma condensed consolidated financial statements
included elsewhere in this Prospectus and the consolidated and condensed
consolidated financial statements incorporated by reference into this Prospectus
from our Annual Report on Form 10-K and Quarterly Report on Form 10-Q set forth
under the "Where You Can Find More Information" section of this Prospectus.


<TABLE>
<CAPTION>
                                          Year Ended                  Year Ended              Six            Six Months Ended
                                         December 31,             December 31, 1998          Months           June 30, 1999
                                        --------------           -------------------         Ended            --------------
                                                                                 As         June 30,                      As
                                      1996         1997         Actual      Adjusted(a)       1998         Actual     Adjusted(b)
                                      ----         ----         ------      -----------       ----         ------     -----------
                                                        (in thousands, except per share data)
<S>                                  <C>        <C>          <C>            <C>           <C>           <C>         <C>
Statement of Operations Data:
Operating revenues:
   Telecommunications services:
      Core.......................    $    604   $   22,653   $    141,466   $  141,466    $  51,117     $ 145,443   $   145,443
      Other......................       3,883        7,143         49,643       49,643       26,621        14,305        14,305
                                     --------   ----------   ------------   ----------    ---------     ---------   -----------
Total telecommunications services       4,487       29,796        191,109      191,109       77,738       159,748       159,748
Information services.............      14,650       41,354         53,338       53,338       24,470        24,850        24,850
                                     --------   ----------   ------------   ----------    ---------     ---------   -----------
      Total operating revenues         19,137       71,150        244,447      244,447      102,208       184,598       184,598
Operating loss:
   Telecommunications services...     (40,731)    (147,134)      (231,017)    (231,017)    (109,985)     (200,899)     (200,899)
   Information services..........      (1,409)      (4,092)       (10,167)     (10,167)         (95)       (7,773)       (7,773)
   General corporate.............     (11,373)     (27,312)       (57,225)     (57,225)     (14,114)      (17,464)      (17,464)
                                     --------   ----------   ------------   ----------    ---------     ---------   -----------
      Total operating loss.......     (53,513)    (178,538)      (298,409)    (298,409)    (124,194)     (226,136)     (226,136)
Interest expense.................     (36,748)     (77,257)      (156,599)    (167,356)     (69,105)     (101,334)     (101,334)
Interest income..................      10,515       17,577         29,758       29,758       15,185         9,980         9,980
Other income, net(c)                        -        4,719          5,500        5,500        2,500         2,000         2,000
                                     --------   ----------   ------------   ----------    ---------     ---------   -----------
Loss from continuing operations..     (79,746)    (233,499)      (419,750)    (430,507)    (175,614)     (315,490)     (315,490)
Loss from discontinued operations      (3,977)     (15,985)       (24,974)     (24,974)      (3,643)            -             -
                                     --------   ----------   ------------   ----------    ---------     ---------   -----------
Net loss.........................     (83,723)    (249,484)      (444,724)    (455,481)    (179,257)     (315,490)     (315,490)
Preferred stock dividends........           -       (5,879)       (42,968)     (67,712)     (19,485)      (24,992)      (35,367)
                                     --------   ----------   ------------   ----------    ---------     ---------   -----------
Net loss applicable to common
stockholders.....................    $(83,723)  $ (255,363)  $   (487,692)  $ (523,193)   $(198,742)    $(340,482)  $  (350,857)
                                     ========   ==========   ============   ==========    =========     =========   ===========
</TABLE>


                                       11
<PAGE>


<TABLE>
<CAPTION>

                                          Year Ended                  Year Ended              Six          Six Months Ended
                                         December 31,             December 31, 1998          Months           June 30, 1999
                                        --------------           -------------------         Ended           --------------
                                                                                 As         June 30,                      As
                                      1996         1997         Actual      Adjusted(a)       1998         Actual     Adjusted(b)
                                      ----         ----         ------      -----------       ----         ------     -----------
                                                        (in thousands, except per share data)

<S>                                 <C>         <C>          <C>           <C>          <C>            <C>         <C>
Basic and Diluted Loss per Share:
   Actual and Pro Forma:
     Loss per share from continuing
          operations.............   $   (2.86)  $   (7.20)   $  (11.96)    $  (12.70)   $    (5.27)    $   (7.23)  $     (7.42)
     Loss per share from discounted
          operations.............       (0.14)      (0.48)       (0.65)        (0.64)        (0.10)            -             -
                                    ----------  ----------   ----------    ----------   -----------    ----------  ------------

     Loss per share..............   $   (3.00)  $   (7.68)   $  (12.61)    $  (13.34)   $    (5.37)    $   (7.23)  $     (7.42)
                                    ==========  ==========   ==========    ==========   ==========     ==========  ============
     Weighted average common shares
          outstanding............      27,911      33,249       38,681        39,213        37,000        47,068        47,298
                                    ==========  ==========   ==========    ==========   ==========     ==========  ============

Other Financial Data:
Capital expenditures.............   $  46,651   $ 222,196    $ 402,206     $ 402,206    $  119,569     $ 327,995   $   327,995
Depreciation and amortization....       3,764      25,102       74,953         74,953       28,294        63,276        63,276
</TABLE>



                                                                  June 30, 1999
                                                                  -------------
                                                                  (in thousands)

Balance Sheet Data:

Cash, cash equivalent and short-term investments.................... $  610,867

Property and equipment, net.........................................  1,140,818
Total assets........................................................  2,569,527
Current portion of long-term debt and capital lease obligations.....    141,400
Long-term debt and capital lease obligations, less current portion..  1,804,270
Total debt..........................................................  1,945,670
Series C cumulative exchangeable redeemable preferred stock.........    215,834
Series D senior cumulative convertible redeemable preferred stock...    200,000
Common and other preferred stock and additional paid-in capital.....  1,005,513
Stockholders' deficit...............................................   (141,280)


- ----------

(a)      Gives effect to (1) a private placement in March 1998 of (A) $200.0
         million of our 10% Senior Subordinated Notes Due 2008 ("March 1998
         Cash-Pay Notes"), (B) $250.0 million of our 11% Senior Subordinated
         Deferred Interest Notes Due 2008 ("March 1998 Deferred Interest Notes"
         and, together with the March 1998 Cash-Pay Notes, the "1998 Notes") and
         (C) $200.0 million principal amount of our 7% Senior Cumulative
         Convertible Preferred Stock Due 2010 ("Series D Preferred Stock")
         ((A)-(C) collectively, the "March 1998 Financing Transactions") and (2)
         the June 1999 Private Placement, each as if they had occurred on
         January 1, 1998. Interest expense has been increased to include
         approximately $10.8 million of interest on such debt and amortization
         of deferred debt offering costs and other related fees for the year
         ended December 31, 1998, but does not include interest income earned on
         additional available cash.

(b)      Gives effect to the June 1999 Private Placement as if it had occurred
         on January 1, 1999.

(c)      The years ended December 31, 1997 and 1998 and the six months ended
         June 30, 1998 and 1999 include a deferred income tax benefit of $2.5
         million, $5.5 million, $2.5 million and $2.0 million, respectively.

                                       12
<PAGE>

                                  RISK FACTORS

         Prospective purchasers of the securities offered hereby should
carefully consider the risk factors set forth below, as well as the other
information appearing in or incorporated by reference into this prospectus,
before making an investment in any such securities.

We have a history of losses and expect that losses will continue in the future.

         Since our inception, we have incurred significant and growing net
losses and significant negative EBITDA. EBITDA means earnings, and negative
EBITDA means losses, in each case before interest, income taxes, depreciation
and amortization, other income (expense) and discontinued operations. Our net
losses and negative EBITDA will continue to increase substantially as a result
of the growth of our telecommunications business in some of our existing
markets, our expansion into additional domestic and international markets and
expenses relating to the servicing of our debt. We incurred net losses and
negative EBITDA of approximately $83.7 million and $49.7 million, respectively,
for the year ended December 31, 1996, $249.5 million and $153.4 million,
respectively, for the year ended December 31, 1997, $444.7 million and $223.5
million, respectively, for the year ended December 31, 1998, $179.3 million and
$95.9 million, respectively for the six months ended June 30, 1998 and $315.5
million and $162.9 million, respectively, for the six months ended June 30,
1999. We cannot assure you that we will ever achieve or, if achieved, maintain,
profitability or positive EBITDA.

Our substantial level of indebtedness could adversely affect our financial
health and prevent us from fulfilling our outstanding debt obligations.

         Our high level of indebtedness and other payment obligations could have
important consequences for holders of our securities as well as our business in
general, including:

         o        limiting our ability to obtain additional financing;

         o        limiting our flexibility in planning for, or reacting to,
                  changes in our business; and

         o        placing us at a competitive disadvantage to less leveraged
                  competitors, which could have more free cash flow to invest in
                  their operations.

         At June 30, 1999, we had approximately $2,295.0 million of consolidated
liabilities, including capitalized lease obligations and trade payables. The
accrual of interest on some of this debt will place significant additional
payment obligations on us. We also may need to incur additional indebtedness. We
continually evaluate the financing alternatives available to us and may decide
to seek additional debt financing in the near future.

In addition to our current level of indebtedness, we and our subsidiaries have
the ability to incur substantially more debt. This additional debt could further
exacerbate the risks described above.

         Although the agreements governing our indebtedness place certain
limitations on the incurrence of additional indebtedness by us and certain of
our subsidiaries, under certain

                                       13
<PAGE>

circumstances we can incur substantial amounts of additional indebtedness. For
example, we may be able to borrow up to $2.0 billion under our Lucent credit
agreement and engage in other equipment financings, all of which will be secured
by equipment and will be senior to the Series F preferred stock. At June 30,
1999, we had borrowed $362.7 million under this financing agreement.
Additionally, the agreements governing our indebtedness do not limit the amount
of debt that our New Media or certain other subsidiaries may incur. If we or our
subsidiaries incur additional debt, the related risks discussed above could
intensify.

We will require a significant amount of cash to service our indebtedness and
outstanding preferred stock. Our ability to generate cash depends on many
factors, some of which are beyond our control.

         A substantial portion of our indebtedness requires cash interest
payments commencing in 2001 and will begin to mature in 2004. In addition,
certain of our preferred stock may require mandatory redemption payments in
cash. We may not have sufficient cash flow to make these payments. If we are
unable to make the required payments, we may be in default under the terms of
substantially all of our outstanding indebtedness and certain of our preferred
stock. Also, under certain circumstances, holders of such indebtedness may be
able to accelerate payments owed them under such indebtedness. In this event, it
is unlikely that all of our obligations would be paid in full. We expect that we
will need to refinance certain of our indebtedness on or prior to maturity.
However, our ability to obtain any such additional financing may be limited by
our financial condition, our operating results or the condition of the financial
markets. We cannot assure you that we will be able to refinance these
obligations or, if refinanced, what the terms of such refinancing will be.

We require significant capital to expand our operations and make acquisitions.

         The expansion of our telecommunications operations domestically and
abroad and the continued funding of operating expenses require substantial
capital investment. Additionally, as part of our strategy, we may seek to
acquire complementary assets or businesses (including additional spectrum
licenses), which also could require substantial capital investment. Under our
current business plan, we plan to spend approximately $600.0 million in 1999 for
capital equipment. We anticipate, based on this plan and related assumptions
(including an assumption of full availability of the $2.0 billion under our
Lucent credit agreement), that our existing financial resources, payments to be
received from Williams and additional accounts receivable and equipment
financings that we intend to seek, will be sufficient to fund our operations and
capital requirements for approximately 18 to 24 months from the date of this
prospectus. We may be required to seek additional sources of capital sooner than
we anticipate if:

         o        our operating assumptions change or prove to be inaccurate;

         o        less than $2.0 billion becomes available under the Lucent
                  credit agreement;

         o        we fail to secure additional equipment and accounts receivable
                  financing;

         o        we consummate any acquisitions of significant businesses or
                  assets (including spectrum licenses); or

                                       14
<PAGE>

         o        we further accelerate our plan and enter markets more rapidly.

         We continually evaluate the financing alternatives available to us and
may decide to seek additional financing in the future. We cannot assure you that
additional financing would be available or, if available, that we would be able
to obtain it on acceptable terms.

Our quarterly results of operations are not always indicative of our results of
operations for the full year or otherwise.

         Our quarterly results of operations may vary significantly, depending
on factors such as timing of substantial capacity sales, the purchase of
intercity or intracity fiber backbones (in place of temporary leased circuits),
the acquisition of additional businesses or the reduction of vendor costs
through the renegotiation of term contracts or receipt of refunds or credits
resulting from volume or performance standards. Accordingly, results of
operations for any quarter are not necessarily indicative of the results of
operations for a full year or otherwise.

We are subject to extensive federal and state laws, rules and regulations. These
laws, rules and regulations could change at any time in an unpredictable manner.

         The telecommunications services business is highly regulated
domestically at the federal, state and local levels, and abroad by foreign
governments. Our continued ability to acquire and maintain wireless licenses,
which are extremely important to our success, is also subject to extensive
regulation. This regulatory environment directly affects the breadth of services
we are able to offer, the rates, terms and conditions of those services and the
rates, terms and conditions of necessary underlying services we must secure from
other telecommunications providers. We also are affected indirectly by such
regulatory environment's effect on companies that offer competing services. This
regulatory environment is subject to continual change as a result of new
legislation, regulations adopted from time to time by applicable regulatory
authorities and judicial interpretation of these laws and regulations. We are
not able to predict the extent to which any such change in the regulatory
environment would affect our business. We cannot assure you that changes in
legislation, regulations and interpretations would not have a significant
adverse impact on our ability to operate and achieve our business objectives.

We operate our business in a highly competitive industry. Many of our
competitors are better established and have significantly more resources.

         We face strong competition in each of the telecommunications markets
where we operate. Competitors include regional, national and global companies.
Moreover, the growing consolidation of telecommunications companies and
formation of strategic alliances within the telecommunications industry could
give rise to significant new or stronger competitors. Most of our competitors
are well-established and have larger and better developed networks and systems,
longer-standing relationships with customers and suppliers, greater name
recognition and significantly greater financial, technical and marketing
resources. Many of these companies have the ability to subsidize competing
services with revenues from a variety of their other services. As competition
increases in domestic and international telecommunications markets, we
anticipate a significant increase in general pricing pressures. We have not
obtained significant

                                       15
<PAGE>

market share in any of the markets where we offer services, nor do we expect to
do so given the size of these markets, the intense competition in these markets
and the diversity of customer requirements. We cannot assure you that we will be
able to compete effectively in any of our markets.

         The industry in which our new media subsidiaries operate is also very
competitive. The new media industry consists of a large number of entities
producing, owning or controlling news, sports, entertainment, educational and
informational content and services (including on-line computer services),
telecommunications companies, television broadcast companies, sports franchises,
film and television studios, record companies, newspaper and magazine publishing
companies and universities. Competition is intense for timely and highly
marketable or usable information and entertainment content. Almost all of the
entities with which our new media subsidiaries compete have significantly
greater presence in the various media markets and greater resources, including
existing content libraries, financial resources, personnel and existing
production and distribution channels. We cannot assure you that we will be able
to compete successfully in the emerging new media industry.

Our rapid growth will place a significant strain on us. Many factors will affect
our ability to manage our future growth.

         We are pursuing a strategy of aggressive and rapid growth, including
the accelerated rollout of our telecommunications services, acquisitions of
businesses and assets (including additional spectrum licenses) and the hiring of
additional management and technical and marketing personnel, all of which will
result in higher capital expenditures and operating expenses. Our rapid growth
has in the past placed, and may in the future place, a significant strain on our
business resources. Our ability to manage future growth will depend upon our
ability to:

         o        manage the simultaneous implementation of our plan in multiple
                  markets in varying stages of development;

         o        cope with both predictable and unforseen problems associated
                  with being a relatively new entrant in a rapidly evolving
                  industry;

         o        effectively monitor our operations so as to control costs and
                  maintain effective quality controls; and

         o        significantly expand our internal management, technical,
                  information and accounting systems.

         Our failure to achieve any of the above in an efficient manner and at a
pace consistent with the growth of our business could have an adverse effect on
our business, financial condition, results of operations, the value of our
securities (including the Series F preferred stock) or our subsidiaries'
abilities to make principal and interest payments on outstanding indebtedness or
dividends or distributions on our common and preferred stock, including the
Series F preferred stock.

                                       16
<PAGE>

         As part of our strategy, we may acquire complementary assets or
businesses. The pursuit of acquisition opportunities will place significant
demands on the time and attention of our senior management and will involve
considerable financial and other costs with respect to identifying and
investigating acquisition candidates, negotiating acquisition agreements and
integrating the acquired businesses with our existing operations. Employees and
customers of acquired businesses may sever their relationships with these
businesses during or after such an acquisition. We cannot assure you that we
will be able to successfully consummate any acquisitions or integrate any
business or assets which we may acquire.

We plan on entering additional foreign markets. We will be subject to many
additional risks as we seek to enter such markets and as they become
operational.

         We are expanding the offering of our telecommunications services into
parts of Europe, Asia and South America. Certain risks inherent in our seeking
to enter foreign markets and doing business within such markets include:

         o        regulatory limitations delaying, restricting or prohibiting us
                  from providing our services, including the inability to
                  acquire spectrum rights or other licenses;

         o        difficulties in staffing and managing our foreign operations;

         o        unanticipated changes in regulatory requirements, tariffs,
                  customs, duties and other trade barriers;

         o        limitations on our flexibility in structuring our foreign
                  investments imposed by the agreements governing our
                  outstanding indebtedness;

         o        longer payment cycles and problems in collecting accounts
                  receivable;

         o        political risks;

         o        fluctuations in exchange rates of international currencies;
                  and

         o        potentially adverse tax consequences resulting from operating
                  in multiple countries with different laws and regulations.

         Furthermore, the international rates charged to customers are likely to
decrease in the future for many reasons, including increased competition among
existing and new carriers and additional strategic alliances or joint ventures
among large international carriers. This pricing pressure is likely to have a
significant impact upon the profitability of our operations abroad. We cannot
assure you that we will be successful in overcoming these or other risks
associated with our international expansion.

                                       17
<PAGE>

We must obtain access rights to buildings on which we wish to place our
antennas. Furthermore, our Wireless Fiber services operate by linking these
antennas via a wireless signal, but there is a limit on how far any two of our
linked antennas can be apart.

         We must obtain rights to access each building or structure where our
antennas will be placed. We will not be able to implement our expansion at the
rate currently planned if we do not obtain these access rights in a timely
manner. We seek to prequalify and obtain rights to buildings required to service
potential customers in our licensed areas in advance of anticipated orders. Our
prequalification activities may require the payment of option fees to the owners
of buildings. We cannot assure you that we will be successful in obtaining the
access rights necessary to expand our Wireless Fiber services as planned or in
obtaining any construction, zoning, franchises or other governmental permits
that may be necessary for us to provide Wireless Fiber service to our customers
at reasonable costs or on favorable terms, or at all. Further, we cannot assure
you that we will receive orders for Wireless Fiber services which allow us to
utilize access rights we do obtain.

         In addition, we may be required to use additional antennas in certain
circumstances, which may render the use of Wireless Fiber uneconomical for the
provision of our services to certain buildings. Characteristics of Wireless
Fiber that may require us to use additional antennas include the following:

         o        Wireless Fiber services require an unobstructed line of sight
                  between two linked antennas. Accordingly, the establishment of
                  Wireless Fiber services may require additional antennas to
                  avoid obstacles (such as buildings).

         o        The maximum allowable distance between any two corresponding
                  antennas is five miles (although we generally maintain
                  distances of less than two miles, or shorter distances in
                  certain areas, to meet our internal performance standards).
                  Accordingly, additional antennas are required to cover
                  distances in excess of optimal performance distances.

         o        Weather conditions, such as rainfall intensity and raindrop
                  size, can adversely impact transmission quality at standard
                  optimal performance distances and may necessitate shorter
                  distances between antennas to maintain desired transmission
                  quality. Accordingly, in areas frequently experiencing such
                  weather conditions, we may be required to use additional
                  antennas to cover required distances.

         Where additional antennas are required, we must also obtain
corresponding roof rights, which can be a time-consuming and costly undertaking.

As fixed wireless telecommunications services are not yet widely used, we are
uncertain how successful we will be in marketing our Wireless Fiber services.

         The provision of fixed wireless telecommunications services over 38 GHz
and 28 GHz spectrum is an emerging sector of the telecommunications industry and
has not yet been widely accepted. Historically, this sector has been associated
with the reputation of previous microwave radio technologies for unreliability
and lack of security. We have not yet obtained a significant

                                       18
<PAGE>

market share in any of the licensed areas where we offer our Wireless Fiber
services, although we have been marketing them since December 1994. We cannot
assure you that a substantial market will develop for fixed wireless
telecommunications services or that we will be able to successfully market our
Wireless Fiber services.

We must respond to the rapid changes in technology, services and standards which
characterize our industry.

         The telecommunications and related technology industries are subject to
rapid technological change, frequent new service introductions and evolving
industry standards. We believe that our future success will depend largely on
our ability to anticipate or adapt to such changes and to offer, on a timely
basis, services that meet evolving standards. We cannot predict the extent to
which competitors using existing or currently undeployed methods of delivery of
telecommunications services will compete with our Wireless Fiber services.
Furthermore, we cannot be certain that existing, proposed or as yet undeveloped
technologies will not render 38 GHz-based (and other spectrum-based) systems
less profitable or less viable. There are several existing and evolving
technologies, including coaxial cable, unlicensed spectrum and digital
subscriber line technology, that allow broadband transmission over existing
copper lines. We cannot assure you that we will have the resources to acquire
new technologies or to introduce new services that could compete with future
technologies or that equipment held in our inventory will not be rendered
obsolete.

We rely in large part on third parties with whom we have business arrangements.
Our success depends on the abilities of these parties to provide reliable
services to us.

         To operate our growing business, we have negotiated business
arrangements with unrelated third parties. The failure of any of these third
parties to perform under their respective agreements or the termination or
discontinuance of any of these agreements could have an adverse effect on our
results of operations or our ability to service our customers. Examples of these
arrangements include:

         o        Our use of the facilities of incumbent local exchange
                  carriers, fiber providers, such as Williams and Metromedia
                  Fiber, and major long distance companies to carry some or all
                  of our customers' traffic.

         o        Our use of third parties to market our Wireless Fiber services
                  and maintain our operational systems.

         o        Our agreement with Lucent to provide extensive services in
                  connection with the buildout of our broadband network. Our
                  expansion and the buildout of our network could be delayed if
                  Lucent does not adequately perform these services or if we are
                  required to find an alternative to Lucent.

                                       19
<PAGE>

The agreements governing our indebtedness and preferred stock impose significant
restrictions on our business and financing activities.


         The agreements and other instruments governing our indebtedness and
certain of our preferred stock impose significant operating and financial
restrictions on us, including certain limitations on our ability to incur
additional indebtedness, create liens on our assets, pay dividends, sell assets,
engage in mergers or acquisitions or make investments. Our failure to comply
with any such restrictions could limit the availability of borrowings or result
in a default under the terms of our indebtedness. Moreover, these restrictions
could limit our ability to engage in certain business transactions which we may
wish to consummate, including joint ventures or similar arrangements with
foreign partners in connection with our expansion abroad. Our inability to
consummate any such transaction could have an adverse effect on our operations,
the value of our securities, including the Series F preferred stock, or on our
subsidiaries' abilities to make principal and interest payments on outstanding
indebtedness or dividends or distributions on our common and preferred stock.


We must hire and retain qualified personnel to operate our growing business and
competition for these employees is intense.

         We believe that our growth and future success will depend in large part
on our continued ability to attract and retain highly skilled and qualified
personnel. The failure to recruit additional qualified personnel in the future
could significantly impede our ability to expand our business domestically and
abroad, to complete the integration of acquired businesses or to otherwise
implement our strategy. Largely due to deregulation and the significant increase
in the number of companies providing telecommunications services, competition
for qualified personnel in the telecommunications industry is intense. We cannot
assure you that we will be able to hire or retain necessary personnel.

Computer programs and microprocessors that have time-sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000, or not
recognize the date at all, which could result in major system failures or
miscalculations.

         We are currently addressing the issue of whether or to what extent our
systems will be vulnerable to potential errors and failures as a result of the
"Year 2000" problem, which is the result of certain computer programs being
written using two digits, rather than four digits, to define the applicable
year. Computer programs and microprocessors that have time-sensitive software
may recognize a date using "00" as the year 1900 rather than the year 2000, or
not recognize the date at all, which could result in major system failures or
miscalculations. If we or our suppliers or vendors experience Year 2000
problems, these problems could adversely impact our ability to service our
customers or otherwise carry on our business, including causing interruptions in
the operation of our network, traffic data, customer order processing and
provisioning systems, customer billing and invoicing and data interfaces to and
from these systems.

         We believe that our exposure to the Year 2000 problem, as it relates to
our internal systems, is somewhat limited by the fact that substantially all of
our existing systems have been purchased or replaced since 1996 or are currently
under development. Notwithstanding this

                                       20
<PAGE>

belief, we are working aggressively to identify and remediate potential Year
2000 problems in all of our new and existing mission-critical and
business-critical systems and applications, including those supplied by third
party vendors. Although we expect to have identified and remediated all Year
2000 problems in our internal systems prior to the end of 1999, if any
significant Year 2000 problems in these systems or those of our suppliers or
vendors are not uncovered or are not remediated in a timely manner, significant
failures of these functions could occur and could have adverse consequences for
our operations.

Emissions from our antennas may be a health risk.

         The use of wireless equipment, such as antennas, has been alleged to
pose health risks due to radio frequency emissions. Any allegations of health
risks, if proven, could result in liability on our part. In addition, we could
be required to reduce power in our transmissions or otherwise change the way we
operate in order to reduce emissions to acceptable levels. Any of these results
could reduce public acceptance of wireless systems and adversely affect our
financial condition or results of operations. The FCC recently adopted new
guidelines and methods for evaluating the environmental effects of such
emissions from FCC-regulated transmitters, including wireless antennas. The
updated guidelines and methods generally are more stringent than those
previously in effect. We expect that all of our equipment and operations will
comply with applicable FCC guidelines.

Certain provisions of our certificate of incorporation could have effects that
conflict with the interests of our stockholders.

         Certain provisions of our certificate of incorporation could make it
more difficult for a third party to acquire control of us, even if such change
in control would be beneficial to our stockholders. For example, our certificate
of incorporation allows us to issue preferred stock without stockholder
approval. We also have adopted a rights plan that grants certain of our
stockholders the right to buy shares of preferred stock if a person acquires 10%
or more of our outstanding common stock. Any such issuances of preferred stock
could make it more difficult for a third party to acquire us.

We are restricted from paying cash dividends and from redeeming the Series F
preferred stock. We also could be prevented from paying dividends in shares of
our common stock.

         The terms of the instruments governing our indebtedness and certain of
our preferred stock restrict our ability to pay cash dividends and to redeem the
Series F preferred stock. Our ability to pay cash dividends and redeem our
Series F preferred stock will depend on our meeting certain financial criteria,
which in turn will require significant improvements in the Company's EBITDA and
consolidated net worth. Even if the terms of the instruments governing our
indebtedness and preferred stock allow us to pay cash dividends and to redeem
the Series F preferred stock, we can make such payments only from our "surplus"
(the excess of our total assets over the sum of our liabilities plus the par
value of our outstanding capital stock) and we cannot assure you that we will
have any surplus. Moreover, without surplus, we cannot pay dividends in shares
of our common stock.

                                       21
<PAGE>

Our ability to issue senior preferred stock in the future could adversely affect
the rights of holders of Series F preferred stock and our common stock.

         We are authorized to issue preferred stock in one or more series on
terms that may be determined at the time of issuance by our board of directors.
In certain instances, a series of preferred stock could include voting rights,
preferences as to dividends and liquidation, conversion and redemption rights
senior to the Series F preferred stock, and in all instances, senior to our
common stock. The future issuance of preferred stock could effectively diminish
or supersede the dividends and liquidation preferences of the Series F preferred
stock and adversely affect our common stock.

The exercise or conversion of our outstanding options, warrants and other
convertible securities into common stock will dilute the percentage ownership of
our stockholders. The sale of such common stock in the open market could
adversely affect the market price of our common stock.

         As of August 25, 1999, there were outstanding options and warrants to
purchase approximately 17,954,000 shares of our common stock and more options
will be granted in the future under our employee benefit plans. Additionally,
certain of our outstanding securities, including the Series F preferred stock,
are currently convertible into approximately 13,465,000 shares of our common
stock. Substantially all of the shares of common stock underlying such
securities are or will be registered for resale under the Securities Act. The
exercise or conversion of outstanding stock options, warrants or other
convertible securities will dilute the percentage ownership of our other
stockholders. In addition, any sales in the public market of shares of our
common stock issuable upon the exercise or conversion of such stock options,
warrants or convertible securities, or the perception that such sales could
occur, may adversely affect the prevailing market price of our common stock.

The sale of a substantial number of shares of our common stock in the public
market could adversely affect the market price of our common stock.

         Substantially all of our currently outstanding shares of common stock
have been registered for sale under the Securities Act, are eligible for sale
under an exemption from the registration requirements or are subject to
registration rights pursuant to which holders may require us to register such
shares in the future. Sales or the expectation of sales of a substantial number
of shares of our common stock in the public market could adversely affect the
prevailing market price of our common stock.

Your right to receive liquidation and dividend payments on the Series F
preferred stock is junior to our existing and future senior indebtedness and to
all of the liabilities of our subsidiaries.

         Our obligations with respect to the Series F preferred stock do not
constitute indebtedness for borrowed money and with respect to liquidation and
dividend payments rank:

         o        junior to all present and future indebtedness and other
                  payment obligations of ours and of our subsidiaries and all
                  future Senior Stock (as defined);

                                       22
<PAGE>

         o        on parity with our Series C preferred stock, Series D
                  preferred stock and all future capital stock designated as on
                  parity; and

         o        senior to our Series A preferred stock, Series E preferred
                  stock and all classes of common stock.


Further, the claims of creditors of our subsidiaries will be effectively senior
to all payments, including liquidation and dividend payments on the Series F
preferred stock. As of June 30, 1999, we had approximately $2,295.0 million of
indebtedness and other liabilities (including capitalized lease obligations and
trade payables of our subsidiaries) ^, all of which are senior in right of
payment to the Series F preferred stock. We currently have no senior stock
outstanding. In the event of our bankruptcy, liquidation or reorganization, our
assets will be available to pay obligations on the Series F preferred stock only
after all of our indebtedness and all Senior Stock, if any, has been paid, and
there may not be sufficient assets remaining to pay amounts due on any or all of
the Series F preferred stock then outstanding and any preferred stock ranking on
parity with the Series F preferred stock.


Because we are a holding company, we have no significant assets other than stock
of our subsidiaries and the proceeds generated from sales of our securities.
Once these proceeds are spent, we will depend on our subsidiaries to generate
the funds needed to operate our business.

         We are a holding company with no business operations. Our only material
assets consist of the stock of our subsidiaries and the proceeds raised from the
sale of our equity and debt securities, all of which we have loaned or
contributed, or intend to loan or contribute, to our subsidiaries. We will have
to rely upon dividends and other payments from our subsidiaries to generate the
funds necessary to repurchase the Series F preferred stock or make cash dividend
payments, if any. Our subsidiaries, however, are legally distinct from us and
have no obligation, contingent or otherwise, to pay amounts due pursuant to the
Series F preferred stock or to make funds available for these payments. Our
subsidiaries have not guaranteed the Series F preferred stock. The ability of
our subsidiaries to make dividend and other payments to us is subject to, among
other things, the availability of funds, the terms of our subsidiaries'
indebtedness and applicable state laws.

We cannot assure you that an active trading market will develop for the Series F
preferred stock.

         We have been informed by the initial purchasers of the Series F
preferred stock in the June 1999 Private Placement that they intend to make a
market in the Series F preferred stock; however, they are not obligated to do so
and may cease their market-making activities at any time. In addition, the
liquidity of any trading market in the Series F preferred stock, and the market
price quoted for the Series F preferred stock, may be adversely affected by
changes in the overall market for convertible securities and by changes in our
financial performance or prospects or in the prospects for companies in our
industry generally. As a result, we cannot assure you that an active trading
market will develop or be maintained for the Series F preferred stock.

                                       23
<PAGE>

Restrictions applicable to the conversion shares and the dividend shares.

         With respect to shares of Series F preferred stock that are "restricted
securities" on a record date for the payment of dividends or issuance of
conversion shares, the dividend shares and the conversion shares issued thereon
will also be treated as "restricted securities" as defined in Rule 144, will
bear a legend to such effect and will not be transferable by the recipient
thereof except pursuant to an effective registration statement (such as the
registration statement of which this prospectus forms a part) or an exemption
from registration. All the conversion shares and dividend shares issued with
respect to restricted shares of Series F preferred stock will be issued in
physical certificated form and will not be eligible for receipt in global form
through the facilities of the Depositary. Certificates for such dividend share
will be mailed or made available at the office of the transfer agent for the
Series F preferred stock on or as soon as possible after the relevant dividend
payment date to those beneficial holders of Series F preferred stock shown on
the records of the Depositary at the close of business on the relevant record
date. As a result of the requirement for the physical delivery of such dividend
shares, holders who have not made arrangements with the Depositary, the transfer
agent and WinStar prior to a dividend payment date for the delivery of the
physical certificates on such dividend payment date may not receive physical
delivery until several days after the dividend payment date. See "Description of
the Series F Preferred Stock-Registration Rights." With respect to shares of
Series F preferred stock that are no longer "restricted securities" on a record
date for the payment of dividends or on a conversion date, either as a result of
a resale of the Series F preferred stock pursuant to the registration statement
or otherwise, all dividend shares distributed on the related dividend payment
date and all conversion shares on the conversion date will be freely
transferable without restriction under the Securities Act (other than by
affiliates), and such shares will be eligible for receipt in global form through
the facilities of the Depositary.

Certain tax considerations relating to the Series F preferred stock.

         Distributions on the Series F preferred stock will be taxable for
United States federal income tax purposes as ordinary dividend income (and
eligible for the dividends-received deduction for certain United States
corporate holders) only to the extent paid out of our current or accumulated
earnings and profits as determined for federal income tax purposes and otherwise
will be treated in the manner described under "Certain United States Federal
Income Tax Considerations-Tax Considerations for U.S. Holders of Series F
preferred stock-Distributions in General." However, we do not currently have any
current or accumulated earnings and profits and cannot accurately predict at
what point we will have current or accumulated earnings and profits. Absent
current or accumulated earnings and profits, we anticipate that distributions on
the Series F preferred stock will constitute tax-free returns of capital to the
extent of the holder's tax basis in the Series F preferred stock and thereafter
capital gain and will not be eligible for the dividends-received deduction.

         In the case of a distribution on the Series F preferred stock that is
paid in the form of shares of common stock, the fair market value of the
distributed shares on the distribution date will be taxable for United States
federal income tax purposes in the same manner as a cash distribution on the
distribution date notwithstanding that the cash deemed attributable to such
distribution will not be received by the holder until such holder disposes of
such stock at a later time. In addition, the amount realized in connection with
such disposition may differ from the

                                       24
<PAGE>

amount of cash deemed attributable to such aforementioned distribution. See
"Certain United States Federal Income Tax Considerations."

The market price of our common stock has fluctuated significantly, sometimes in
a manner unrelated to our performance.

         The market price of our common stock could vary widely in response to
various factors and events, including:

         o        the number of shares of our common stock being sold and
                  purchased in the marketplace;

         o        variations in our operating results;

         o        press reports;

         o        regulation and industry trends;

         o        rumors of significant events which can circulate quickly in
                  the marketplace, particularly over the Internet; and

         o        the difference between our actual results and the results
                  expected by investors and analysts.

         Since our common stock has been publicly traded, its market price has
fluctuated over a wide range and we expect it to continue to do so in the
future. In addition, the stock market in recent years has experienced broad
price and volume fluctuations that have often been unrelated to the operating
performance of companies, particularly telecommunications and technology
companies. These broad market fluctuations also may adversely affect the market
price of our common stock. We cannot assure you that the market price of the
common stock will exceed the effective conversion price of the Series F
preferred stock.

                                       25
<PAGE>

                           PRICE RANGE OF COMMON STOCK

         Our common stock has been quoted on the Nasdaq National Market since
June 1994 under the symbol "WCII."

         The following table sets forth, for the fiscal periods indicated, the
high and low last sale prices of our common stock as reported on the Nasdaq
National Market. The quotes represent "inter-dealer" prices without adjustment
or mark-ups, mark-downs or commissions and may not necessarily represent actual
transactions.

Period Ended                                      High              Low
- ------------                                      ----              ---

March 31, 1997                                  $20.25             $11.63
June 30, 1997                                    14.63              10.13
September 30, 1997                               19.19              14.25
December 31, 1997                                29.25              21.25
March 31, 1998                                   44.81              24.63
June 30, 1998                                    47.38              36.63
September 30, 1998                               41.75              18.25
December 31, 1998                                39.00              13.00
March 31, 1999                                   44.44              29.75
June 30, 1999                                    59.00              37.00
July 1, 1999 through August 25, 1999             62.44              43.25

         The last sale price of our common stock on August 25, 1999 was $53.00
per share. As of August 25, 1999, 54,760,789 shares of our common stock were
held by more than 1,000 beneficial holders.

                                 DIVIDEND POLICY

         We never have paid any dividends on our common stock and we do not
intend to pay any dividends in the foreseeable future. In addition, the terms of
the instruments governing our indebtedness and preferred stock restrict our
ability to pay cash dividends. We intend to retain our cash for the continued
expansion of our business.

                                       26
<PAGE>

                                 CAPITALIZATION

         The following table sets forth our cash and capitalization as of June
30, 1999 and should be read in conjunction with the consolidated and condensed
consolidated financial statements incorporated by reference into this
Prospectus.


<TABLE>
<CAPTION>

                                                                                       (in thousands,
                                                                                      except share data)
                                                                                  ----------------------

<S>                                                                               <C>
Cash, cash equivalents and short-term investments..............................   $              610,867
                                                                                  ======================
Long term debt and capital lease obligations:

      12 1/2% Guaranteed Senior Secured Notes Due 2004 of WEC..................   $              200,000
      12 1/2% Guaranteed Senior Secured Notes Due 2004 of WEC II...............                   50,000
      14% Senior Discount Notes Due 2005.......................................                  247,148
      14 1/2Senior Deferred Interest Notes Due 2005............................                  137,788
      15% Senior Subordinated Deferred Interest Notes Due 2007.................                  128,672
      10% Senior Subordinated Notes Due 2008...................................                  200,000
      11% Senior Subordinated Deferred Interest Notes Due 2008.................                  286,851
      Lucent financing agreement...............................................                  362,738
      Capital lease obligations and other notes (including current portion)....                  332,473
                                                                                  ----------------------
             Total long term debt and capital lease obligations................                1,945,670
                                                                                  ----------------------

Series C 14 1/4% Senior Cumulative Exchangeable Preferred Stock Due 2007(a)....                  215,834
                                                                                  ----------------------

Series D 7% Senior Cumulative Convertible Preferred Stock Due 2010(a)..........                  200,000
                                                                                  ----------------------

Stockholders' equity (deficit):

      Series F 7 1/4% Senior Cumulative Convertible Preferred Stock, $.01
         par value, 300,000 shares authorized, 300,000 issued and outstanding..                        3
      Series A 6% Cumulative Convertible Preferred Stock, $.01 par value,
         6,000,000 shares authorized, 4,212,000 issued and outstanding(a)......                       42
      Series E Non-Redeemable Junior Convertible Preferred Stock, $.01
         par value, 75,100 shares authorized, issued and outstanding(a)........                        1
      Common stock, $.01 par value, 200,000,000 shares authorized, 54,326,000
         shares issued and outstanding(b)......................................                      543
      Additional paid-in-capital................................................               1,004,924
      Accumulated deficit.......................................................              (1,134,732)
      Accumulated other comprehensive loss......................................                 (12,061)
                                                                                 -----------------------
             Total stockholders' deficit........................................                (141,280)
                                                                                 -----------------------
                     Total capitalization....................................... $             2,220,224
                                                                                 =======================
</TABLE>



- ---------------------------

(a)      See "Description of Certain Indebtedness and Capital Stock--Preferred
         Stock" for a description of our Series A Preferred Stock, Series C
         Preferred Stock, Series D Preferred Stock, Series E Preferred Stock and
         existing rights to purchase Series B Preferred Stock.

                                       27
<PAGE>

(b)      Does not include (i) 837,000 shares of common stock issuable upon
         exercise of options granted or which may be granted under the 1992
         Performance Equity Plan, (ii) 13,840,000 shares of common stock
         issuable upon exercise of options granted or which may be granted under
         the 1995 Performance Equity Plan, (iii) 8,533,000 shares of common
         stock issuable upon exercise of other outstanding options and warrants,
         (iv) 658,000 shares of common stock issuable under the Employee Stock
         Purchase Plan and (v) approximately 13,465,000 shares of common stock
         issuable upon conversion of our preferred stock. Also does not include
         shares of common stock issuable under commitments to pay approximately
         $1.8 million in common stock in connection with the acquisition of
         additional spectrum licenses. The exercise and conversion prices of a
         substantial majority of the foregoing are below the current market
         price of our common stock as of the date of this Prospectus.

             CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

         The following is a general discussion of the material United States
federal income tax consequences applicable to holders of our Series F preferred
stock resulting from their purchase, ownership, conversion and disposition of
our Series F preferred stock. This discussion is based on the Internal Revenue
Code of 1986, regulations of the Treasury Department, administrative rulings and
pronouncements of the IRS and judicial decisions, all of which are subject to
change, possibly with retroactive effect. This discussion does not purport to
address all the United States federal income tax consequences that may be
applicable to particular holders, including dealers in securities, financial
institutions, insurance companies, persons that hold our Series F preferred
stock or common stock as part of a straddle or conversion transaction and
tax-exempt organizations.

         Except as provided below with respect to non-U.S. holders, this
discussion is limited to U.S. persons who hold our Series F preferred stock and
the common stock as a "capital asset" within the meaning of Section 1221 of the
Code. As used in the discussion which follows, the term "U.S. Holder" means any
person or entity which is (a) a citizen or resident (as defined in Section
7701(b)(1) of the Code) of the United States, (b) a corporation or other entity
taxable as a corporation created or organized in or under the laws of the United
States or of any state thereof (including the District of Columbia) or (c) an
estate or trust that is described in Section 7701(a) (30) of the Code, and a
"Non-U.S. Holder" means any holder of the Series F preferred stock and the
common stock that is not a U.S. Holder.

         Prospective holders should consult their own tax advisors as to any
federal, state, local, foreign or other tax consequences to them of purchasing,
owning and disposing of Series F preferred stock.

Tax Considerations for U.S. Holders of Series F Preferred Stock

         Distributions in general

         Distributions with respect to our Series F preferred stock, whether
paid in cash or dividend shares, will be treated as dividends (taxable as
ordinary income) to the extent of our current and

                                       28
<PAGE>


accumulated earnings and profits as calculated for United States Federal income
tax purposes. The amount of any distribution with respect to our Series F
preferred stock will be equal to the amount of cash distributed or, in the case
of a distribution in the form of common stock, the fair market value of the
shares of common stock on the date of the distribution. We do not anticipate
paying cash dividends on our Series F preferred stock in the foreseeable future.
To the extent that the amount of a distribution with respect to our Series F
preferred stock exceeds our current and accumulated earnings and profits, it
will be treated first as a tax-free return of capital to the extent of the
holder's basis in the Series F preferred stock, and thereafter as capital gain
from the sale of our Series F preferred stock (taxable as described below under
"Sale, Redemption or Other Taxable Disposition of Series F preferred stock"). We
do not currently have any current or accumulated earnings and profits, and
cannot accurately predict when we will have earnings and profits. A holder's
tax basis in dividend shares will be the fair market value of such shares on the
date of the distribution. A holder's holding period for dividend shares will
commence on the day following the date of distribution and will not include such
holder's holding period for the shares of Series F preferred stock with respect
to which the dividend shares were distributed.


         Dividends to corporate holders

         A U.S. Holder that is a corporation otherwise entitled to the
dividends-received deduction as provided in Section 243 of the Code will be
entitled to that deduction (generally at a 70% rate) with respect to amounts
treated as dividends on the Series F preferred stock but will not be entitled to
that deduction with respect to amounts treated as a return of capital or capital
gain. In addition, the benefit of a dividends-received deduction may be reduced
by the corporate alternative minimum tax. In determining entitlement to the
dividends-received deduction, corporate holders should also consider the
provisions of Sections 246(c), 246A and 1059 of the Code and Treasury
Regulations promulgated thereunder, and IRS rulings and administrative
pronouncements relating to such Code provisions.

         Under current law as amended by the Taxpayer Relief Act of 1997 ("TRA
1997"), Section 246(c) of the Code disallows the dividends-received deduction in
its entirety if the holder does not satisfy the applicable holding period
requirement for the dividend-paying stock for a period immediately before or
immediately after such holder becomes entitled to receive each dividend on the
stock. Section 246(c)(4) of the Code provides that a holder may not count toward
this minimum holding period any period in which the holder:

         o        has, among other things, an option to sell Series F preferred
                  stock which it owns;

         o        is under a contractual obligation to sell Series F preferred
                  stock which it owns;

         o        has made (and not closed) a short sale of substantially
                  identical stock or securities, or

         o        has diminished its risk of loss by holding one or more
                  positions with respect to substantially similar or related
                  property.

         For purposes of the second bulletpoint above, the obligation to sell
upon our exercise of our option to redeem Series F preferred stock is not
considered a contractual obligation to sell by

                                       29
<PAGE>

a corporate holder. Under certain circumstances, Section 1059 of the Code (a)
reduces the tax basis of stock by a portion of any "extraordinary dividends"
that are eligible for the dividends-received deduction and (b) to the extent
that the basis reduction would otherwise reduce the tax basis of the Series F
preferred stock below zero, requires immediate recognition of gain, which is
treated as gain from the sale or exchange of the stock. In the case of the
Series F preferred stock, an "extraordinary dividend" would include any amount
treated as a dividend with respect to a redemption that is not pro rata to all
stockholders (or meets certain other requirements), without regard to either the
relative amount of the dividend or the holder's holding period for the Series F
preferred stock.

         Section 246A of the Code contains the "debt-financed portfolio stock"
rules, under which the dividends-received deduction could be reduced to the
extent that a holder incurs indebtedness directly attributable to its investment
in the Series F preferred stock.

         Receipt of conversion shares upon conversion of the Series F preferred
stock

         Gain or loss will not be recognized by a holder upon the conversion of
the Series F preferred stock into conversion shares if no cash is received. A
holder who receives cash in lieu of a fractional share of common stock will in
general be treated as having received such fractional share and having exchanged
it for cash in a redemption, which would be treated in the manner described
under "Sale, Redemption or other Taxable Disposition of the Series F preferred
stock." As discussed therein, a holder who cannot qualify for sale or exchange
treatment under the rules applicable to redemptions will generally be taxable on
the cash received in lieu of a fractional share as a distribution described in
"Distributions in General" above.

         Generally, a holder's basis in the conversion shares will equal the
adjusted tax basis of the converted Series F preferred stock (other than the
portion of such Series F preferred stock, the conversion of which resulted in
the recognition of gain or loss due to the receipt of cash in lieu of fractional
shares). The holding period of such conversion shares will include the holding
period of the converted Series F preferred stock.

         Adjustment of conversion ratio in respect of Series F preferred stock

         Adjustments to the conversion ratio to take into account a stock
dividend or stock split will not be taxable. However, an adjustment to the
conversion ratio to reflect our issuance of certain rights, warrants, evidences
of indebtedness, securities or other assets to holders of common stock (an
"Adjustment") may result in constructive distributions to the holders of the
Series F preferred stock. The amount of any such constructive distribution would
be the fair market value on the date of the Adjustment of the number of shares
of common stock which, if actually distributed to holders of Series F preferred
stock, would produce the same increase in the proportionate interests of such
holders in the assets or earnings and profits of the Company as that produced by
the Adjustment. The distribution would be treated in the manner described above
under "Distributions in General" and "Dividends to Corporate Holders."

                                       30
<PAGE>

         Excessive redemption price

         Under Section 305 of the Code and Treasury Regulations authorized
thereunder, if the redemption price of Series F preferred stock exceeds its
issue price (i.e., its fair market value at its date of original issue) by more
than a de minimis amount, such excess may be treated as a constructive
distribution that will be treated in the same manner as distributions described
above under "Distributions in General." A holder of such Series F preferred
stock would be required to treat such excess as a constructive distribution
received by the holder over the life of such stock under a constant interest
(economic yield) method that takes into account the compounding of yield. It is
anticipated that the mandatory redemption price of the Series F preferred stock
will not exceed its issue price by more than a de minimis amount.

         Accrued dividends on the Series F preferred stock

         Any unpaid dividends on the Series F preferred stock will accrue and
will be payable upon the optional or mandatory redemption of the Series F
preferred stock. The tax treatment of such accruing dividends ("Accrued
Dividends") is not free from doubt. Under current law, it appears that Accrued
Dividends would not be treated as having been received by holders of the Series
F preferred stock until such Accrued Dividends were actually paid in cash, at
which time such amounts would be taxable for United States federal income tax
purposes in the same manner as distributions described above under
"Distributions in General." We intend to take this position and will report to
the IRS on that basis.

         In addition, to the extent of available funds therefor, we will be
obligated under the Certificate of Designation to declare a dividend on the
Series F preferred stock prior to an optional or mandatory redemption thereof in
an amount equal to any Accrued Dividends on the Series F preferred stock.

         Prospective purchasers of Series F preferred stock are urged to consult
their own tax advisors as to the tax treatment of Accrued Dividends.

         Sale, redemption or other taxable disposition of the Series F preferred
stock

         Upon a sale or other taxable disposition a holder generally (except
upon certain redemptions as discussed below) will recognize capital gain or loss
for United States Federal income tax purposes in an amount equal to the
difference between (i) the sum of the amount of cash and the fair market value
of any property received upon such sale or other taxable disposition and (ii)
the holder's adjusted tax basis in the Series F preferred stock being disposed.
Such gain or loss will be long-term capital gain or loss if the Series F
preferred stock has been held by the holder for more than one year at the time
of disposition.

         A holder's initial tax basis in the Series F preferred stock generally
will be the price such holder paid for such Series F preferred stock.

         Gain or loss recognized by a holder on a redemption of the Series F
preferred stock would be treated as a sale or exchange and therefore qualify for
the treatment described above if, taking into account stock that is actually or
constructively owned under the constructive ownership rules

                                       31
<PAGE>

of Section 318 of the Code by such holder, either (i) the holder's interest in
our stock is completely terminated as a result of the redemption, (ii) such
holder's percentage ownership of our voting stock immediately after the
redemption is less than 80% of such holder's percentage ownership immediately
before the redemption or (iii) the redemption is "not essentially equivalent to
a dividend." Under Section 318 of the Code, a person generally will be treated
as the owner of our stock owned by certain related parties or certain entities
in which the person owns an interest and stock that a holder could acquire
through exercise of an option. For this purpose, an option would include the
conversion right under the Series F preferred stock. Whether a redemption is not
essentially equivalent to a dividend depends on each holder's facts and
circumstances, but in any event requires a "meaningful reduction" in such
holder's equity interest in WinStar. A holder of the Series F preferred stock
who sells some or all of the stock owned by it may be able to take such sales
into account to satisfy one of the foregoing conditions. Conversely, a holder
who purchases additional shares of our stock may be required to take such shares
into account in determining whether any of the foregoing conditions are
satisfied.

         If none of the above conditions is satisfied to qualify for sale or
exchange treatment, the entire amount of the cash (or property) received on a
redemption will be treated as a distribution (without offset by the holder's tax
basis in the redeemed shares), which will be treated in the same manner as
distributions described above under "Distributions in General." In such case,
the holder's basis in the redeemed the Series F preferred stock would be
transferred to the holder's remaining shares of our stock (if any).

         If the holder does not retain any shares of our stock, but dividend
treatment arises because of the constructive ownership rules, such basis will be
entirely lost to the holder.

         Information reporting and backup withholding on U.S. Holders

         Information reporting and backup withholding may apply with respect to
our payments of dividends on the Series F preferred stock and to certain
payments of proceeds on the sale or redemption of the Series F preferred stock.
Such payments will be subject to backup withholding at a rate of 31 percent
unless the beneficial owner of such security furnishes the payor or its agent
with a taxpayer identification number, certified under penalties of perjury, and
certain other information, or otherwise establishes, in the manner prescribed by
law, an exemption from backup withholding. In addition, if the Series F
preferred stock is sold to (or through) a "broker," the broker may be required
to withhold 31 percent of the entire sales price, unless either (i) the broker
determines that the seller is a corporation or other exempt recipient or (ii)
the seller provides, in the required manner, certain identifying information.
Such a sale must also be reported by the broker to the IRS, unless the broker
determines that the seller is an exempt recipient. The term "broker" as defined
by Treasury regulations includes all persons who, in the ordinary course of
their business, stand ready to effect sales made by others.

         Any amount withheld under the backup withholding rules from a payment
to a holder is allowable as a credit against the holder's United States Federal
income tax, which may entitle the holder to a refund, provided that the holder
furnishes the required information to the IRS. In addition, certain penalties
may be imposed by the IRS on a holder who is required to supply information but
does not do so in the proper manner.

                                       32
<PAGE>

Tax Considerations for Non-U.S. Holders of Series F Preferred Stock

         Dividends

         Dividends paid to a Non-U.S. Holder of Series F preferred stock will be
subject to withholding of United States Federal income tax at a 30% rate or such
lower rate as may be provided by an income tax treaty between the United States
and the country of which the Non-U.S. Holder is a tax resident, unless (i) the
dividends are effectively connected with the conduct of a trade or business of
the Non-U.S. Holder within the United States and the Non-U.S. Holder provides
the payor with proper documentation or (ii) if a tax treaty applies, are
attributable to a U.S. permanent establishment maintained by the Non-U.S.
Holder. In order to claim the benefit of an applicable tax treaty rate, a
Non-U.S. Holder may have to file with the Company or its dividend paying agent
an exemption or reduced treaty rate certificate or letter in accordance with the
terms of such treaty. Dividends that are effectively connected with the conduct
of a trade or business within the United States or, if a tax treaty applies, are
attributable to such a United States permanent establishment, are subject to
United States Federal income tax on a net income basis (that is, after allowance
for applicable deductions) at applicable graduated individual or corporate
rates. Any such effectively connected dividends received by a foreign
corporation may, under certain circumstances, be subject to an additional
"branch profits tax" at a 30% rate or such lower rate as may be specified by an
applicable income tax treaty.

         Under current Treasury Regulations, dividends paid to an address
outside the United States are presumed to be paid to a resident of such country
for purposes of the withholding discussed above (unless the payor has knowledge
to the contrary) and, under the current interpretation of Treasury Regulations,
for purposes of determining the applicability of a tax treaty. However, under
final Treasury Regulations issued October 6, 1997, in the case of dividends paid
after December 31, 2000, a Non-U.S. Holder generally would be subject to United
States withholding tax at a 31% rate under the backup withholding rules
described below, rather than at a 30% rate or a reduced rate under an income tax
treaty, unless certain certification procedures (or, in the case of payments
made outside the United States with respect to an offshore account, certain
documentary evidence procedures) are complied with, directly or through an
intermediary. Certain certification and disclosure requirements must be complied
with in order to be exempt from withholding under the effectively connected
income exemption.

         A Non-U.S. Holder of common stock eligible for a reduced rate of United
States withholding tax pursuant to an income tax treaty may obtain a refund of
any excess amounts withheld by filing an appropriate claim for refund with the
IRS, provided that the required information is furnished to the IRS.

         See above "Tax Consequences to U.S. Holders of Series F preferred
stock" for when distributions will be treated as dividends.

         Gain on disposition of Series F preferred stock

         A Non-U.S. Holder generally will not be subject to United States
Federal income tax with respect to gain recognized on a sale or other taxable
disposition of Series F preferred stock unless:

                                       33
<PAGE>

         o        the gain is effectively connected with a trade or business
                  conducted by the Non- U.S. Holder within the United States or,
                  if a tax treaty applies, the gain is attributable to a United
                  States permanent establishment maintained by the Non- U.S.
                  Holder;

         o        in the case of a Non-U.S. Holder who is an individual and
                  holds the Series F preferred stock as a capital asset, such
                  holder is present in the United States for 183 or more days in
                  the taxable year of the sale or other disposition and certain
                  other conditions are met;

         o        the Non-U.S. Holder is subject to tax pursuant to certain
                  provisions of the Code applicable to United States expatriates
                  and former residents; or

         o        the Company is or has been a "U.S. real property holding
                  corporation" for United States Federal income tax purposes at
                  any time within the shorter of the five-year period preceding
                  such disposition or the period such Non-U.S. Holder held the
                  Series F preferred stock.

If we currently are, or were to become, a U.S. real property holding
corporation, gains realized upon a disposition of Series F preferred stock by a
Non-U.S. Holder which did not directly or indirectly own more than 5% of the
Series F preferred stock during the shorter of the periods described above
generally would not be subject to United States Federal income tax so long as
the Series F preferred stock is "regularly traded" on an established securities
market within the meaning of the applicable Treasury Regulation. It is not clear
whether the Series F preferred stock will qualify as regularly traded for
purposes of the aforementioned rule. We believe that we are not currently, and
do not anticipate becoming, a "U.S. real property holding corporation" for
United States Federal income tax purposes.

         If an individual Non-U.S. Holder falls under the first bulletpoint
above, such individual generally will be taxed on the net gain derived from a
sale under regular graduated United States Federal income tax rates. If an
individual Non-U.S. Holder falls under the second bulletpoint above, such
individual generally will be subject to a flat 30% tax on the gain derived from
a sale, which may be offset by certain United States capital losses
(notwithstanding the fact that such individual is not considered a resident of
the United States). Thus, individual Non-U.S. Holders who have spent (or expect
to spend) 183 days or more in the United States in the taxable year in which
they contemplate a sale of Series F preferred stock are urged to consult their
tax advisors as to the tax consequences of such sale.

         If a Non-U.S. Holder that is a foreign corporation falls under the
first bulletpoint above, it generally will be taxed on its net gain under
regular graduated United States Federal income tax rates and, in addition, will
be subject to the branch profits tax equal to 30% of its "effectively connected
earnings and profits" within the meaning of the Code for the taxable year, as
adjusted for certain items, unless it qualifies for a lower rate under an
applicable income tax treaty.

         No United States Federal income tax will be imposed on a Non-U.S.
Holder upon receipt of conversion shares if no cash is received. "Tax
Consequences to U.S. Holders of Series F preferred stock--Receipt of Common
Stock Upon Conversion of the Series F preferred stock."

                                       34
<PAGE>

         Federal estate tax

         Series F preferred stock owned or treated as owned by an individual who
is neither a United States citizen nor a United States resident (as defined for
United States Federal estate tax purposes) at the time of death will be included
the individual's gross estate for the United States Federal estate tax purposes,
unless an applicable estate tax treaty provides otherwise and, therefore, may be
subject to United States Federal estate tax.

         Information reporting and backup withholding tax

         Under Treasury Regulations, the Company must report annually to the IRS
and to each Non-U.S. Holder the amount of dividends paid to such holder and the
tax withheld with respect to such dividends. These information reporting
requirements apply even if withholding was not required because the dividends
were effectively connected with a trade or business in the United States of the
Non-U.S. Holder or withholding was reduced or eliminated by an applicable income
tax treaty. Copies of the information returns reporting such dividends and
withholding may also be made available to the tax authorities in the country in
which the Non-U.S. Holder is a resident under the provisions of an applicable
income tax treaty or agreement.

         United States backup withholding (which generally is a withholding tax
imposed at the rate of 31% on certain payments to persons that fail to furnish
certain information under the United States information reporting requirements)
generally will not apply to (i) dividends paid to Non-U.S. Holders that are
subject to the 30% withholding discussed above (or that are not so subject
because a tax treaty applies that reduces or eliminates such 30% withholding) or
(ii) under current law, dividends paid to a Non-U.S. Holder at an address
outside of the United States. However, under final Treasury Regulations issued
October 6, 1997, in the case of dividends paid after December 31, 2000, a
Non-U.S. Holder generally would be subject to backup withholding at 31% rate,
unless certain certification procedures (or, in the case of payments made
outside the United States with respect to an offshore account, certain
documentary evidence procedures) are complied with, directly or through an
intermediary.

         Backup withholding and information reporting generally will apply to
dividends paid to addresses inside the United States on shares of Series F
preferred stock to beneficial owners that are not "exempt recipients" and that
fail to provide in the manner required certain identifying information.

         Payment by a United States office of a broker of the proceeds of a sale
of Series F preferred stock, or the proceeds of a redemption of Series F
preferred stock that are not treated as a dividend is subject to both backup
withholding and information reporting unless the beneficial owner certifies
under penalties of perjury that it is a Non-U.S. Holder, or otherwise
establishes an exemption. Backup withholding and information reporting generally
will not apply to payment of the proceeds of a sale effected at a foreign office
of a broker. If, however, such broker is, for United States Federal income tax
purposes, a U.S. person, a controlled foreign corporation or a foreign person
50% or more of whose gross income for certain periods is derived from activities
that are effectively connected with the conduct of a trade or business in the
United States, such payments will not be subject to backup withholding but will
be subject to information reporting unless (i) such broker has documentary
evidence in its records that the beneficial owner is a Non-

                                       35
<PAGE>

U.S. Holder and certain other certification conditions are met, or (ii) the
beneficial owner otherwise establishes an exemption, provided such broker does
not have actual knowledge that the payee is a United States person.

         Backup withholding is not an additional tax. Any amounts withheld under
the backup withholding rules will be allowed as a credit against such holder's
United States Federal income tax liability, which may entitle such holder to a
refund, provided the required information is furnished to the IRS.

         The foregoing summary is included herein for general information only
and does not discuss all aspects of United States Federal income taxation that
may be relevant to a particular purchaser or holder of Series F preferred stock
in light of its particular circumstances and income tax situation. Accordingly,
each purchaser or holder of the Series F preferred stock should consult with its
own tax advisor as to the specific tax consequences to such purchaser or holder
from the purchase, ownership and disposition of the Series F preferred stock,
including the application and effect of state, local and foreign income and
other tax laws.

                                       36
<PAGE>

                   DESCRIPTION OF THE SERIES F PREFERRED STOCK

         The following is a summary of certain provisions of the Certificate of
Designations and the Series F preferred stock. A copy of the Certificate of
Designations and the form of Series F preferred stock share certificate is
available upon request to WinStar at the address set forth under "Where You Can
Find More Information" on page 3. The following summary of certain provisions of
the Certificate of Designations does not purport to be complete and is subject
to, and is qualified in its entirety by reference to, all the provisions of the
Certificate of Designations. The definitions of certain capitalized terms used
in the following summary that are not defined herein are defined in the
Certificate of Designations. As used in this section, the term "the Company"
refers to WinStar Communications, Inc. and not any of its subsidiaries.

General

         We have outstanding 300,000 shares of our Series F preferred stock. The
holders of the Series F preferred stock have no preemptive or preferential right
to purchase or subscribe to stock, obligations, warrants or buy other of our
securities. The Series F preferred stock is eligible for trading in the PORTAL
Market.

Ranking

         The Series F preferred stock, with respect to dividend rights and
rights on liquidation, winding-up and dissolution, ranks:


         o        senior to all classes of common stock and to the Company's
                  Series A preferred stock and Series E preferred stock and
                  to each other class of Capital Stock or series of preferred
                  stock established hereafter by the Board of Directors the
                  terms of which do not expressly provide that it ranks senior
                  to, or on a parity with, the Series F preferred stock as to
                  dividend rights and rights on liquidation, winding-up and
                  dissolution of the Company (collectively referred to, together
                  with all classes of common stock of the Company, as "Junior
                  Stock");



         o        on a parity with the Company's Series C preferred stock and
                  Series D preferred stock and each class of Capital Stock or
                  series of preferred stock established hereafter by the Board
                  of Directors, the terms of which expressly provide that such
                  class or series will rank on a parity with the Series F
                  preferred stock as to dividend rights and rights of
                  liquidation, winding-up and dissolution (collectively referred
                  to as "Parity Stock"); and



         o        junior to each class of Capital Stock or series of preferred
                  stock established hereafter by the Board of Directors, the
                  terms of which expressly provide that such class or series
                  will rank senior to the Series F preferred stock as to
                  dividend rights and rights upon liquidation, winding-up and
                  dissolution of the Company (collectively referred to as
                  "Senior Stock").


         While any shares of Series F preferred stock are outstanding, the
Company may not authorize, create or increase the authorized amount of any class
or series of stock that ranks senior

                                       37
<PAGE>

to the Series F preferred stock with respect to the payment of dividends or
amounts upon liquidation, dissolution or winding-up without the consent of the
holders of at least 66 2/3% of the outstanding shares of Series F preferred
stock. However, without the consent of any holder of Series F preferred stock,
the Company may create additional classes of stock, increase the authorized
number of shares of preferred stock or issue series of a stock that ranks on a
parity with, or junior to, the Series F preferred stock with respect, in each
case, to the payment of dividends and amounts upon liquidation, dissolution and
winding-up. See "--Voting Rights."

Dividends

         Holders of shares of Series F preferred stock are entitled to receive,
when, as and if declared by the Board of Directors of the Company out of funds
of the Company legally available for payment, cumulative dividends at the rate
per annum of 7 1/4% per share on the liquidation preference thereof of $1,000
per share of Series F preferred stock (equivalent to $72.50 per annum per
share). Dividends on the Series F preferred stock are payable quarterly on March
15, June 15, September 15 and December 15 of each year commencing December 15,
1999, at such annual rate and shall accrue from the most recent date as to which
dividends shall have been paid or, if no dividends have been paid, from the date
of the original issuance of the Series F preferred stock. Each such dividend is
payable to holders of record as they appear on the stock records of the Company
at the close of business on the Business Day next preceding such quarterly
dividend payment date. Dividends are cumulative from such date, whether or not
in any dividend period or periods there are funds of the Company legally
available for the payment of such dividends. Accumulations of dividends on
shares of Series F preferred stock do not bear interest. Dividends payable on
the Series F preferred stock for any period greater or less than a full
quarterly dividend period are computed on the basis of a 360-day year consisting
of twelve 30-day months.

         Any dividend on the Series F preferred stock is, at our option, payable
(i) in cash or (ii) through the issuance of a number of dividend shares (rounded
up or down to the nearest whole share) equal to the dividend amount divided by
the Discounted Current Market Value (as defined below) of our common stock;
provided, however, that we will not pay any dividends on the Series F preferred
stock in cash prior to the date all obligations under each of the Specified
Indentures (as defined below) and the Lucent credit agreement have been
satisfied in full (the "Specified Debt Satisfaction Date"). With respect to
shares of Series F preferred stock that are "restricted securities" as defined
in Rule 144 under the Securities Act ("Rule 144") on a record date for the
payment of dividends, all dividend shares distributed on the related dividend
payment date in payment of dividends on the Series F preferred stock will be
treated as "restricted securities," will bear a legend to such effect and are
not transferable by the recipient thereof except pursuant to an effective
registration statement or pursuant to an exemption from the registration
requirements of the Securities Act. All such dividend shares will be issued in
physical certificated form and are not eligible for receipt in global form
through the facilities of the Depositary. Certificates for such dividend shares
are mailed or made available at the office of the transfer agent for the Series
F preferred stock on or as soon as possible after the relevant dividend payment
date to those beneficial holders of Series F preferred stock shown on the
records of the Depositary which are delivered to the Company at the close of
business on the relevant record date. As a result of the requirement for
physical delivery of such dividend shares, holders who have not made
arrangements with the Depositary, the transfer agent and the Company prior to a
dividend payment date for the delivery of such physical certificates on such
dividend payment date may

                                       38
<PAGE>

not receive such physical delivery until several days after such dividend
payment date. See "--Registration Rights." With respect to shares of Series F
preferred stock that are no longer "restricted securities" on a record date for
the payment of dividends, either as a result of a resale of the Series F
preferred stock pursuant to the Shelf Registration Statement or otherwise, all
dividend shares distributed on the related dividend payment date in payment of
dividends are freely transferable without restriction under the Securities Act
(other than by affiliates), and such shares are eligible for receipt in global
form through the facilities of the Depositary.

         Notwithstanding the foregoing, if, on any record date occurring prior
to June 17, 2001 for the payment of dividends that are to be paid in dividend
shares, a Shelf Registration Statement has not been declared effective or is not
usable for the resale of the dividend shares to be received on the related
dividend payment date, payment of such dividends will be deferred and will be
paid on a subsequent payment date determined by the Company, together with
dividends on the Series F preferred stock at an increased dividend rate which
shall accrue from the regular dividend payment date as to which dividends were
not paid until such subsequent payment date. See "--Registration Rights."

         The "Discounted Current Market Value" of our common stock with respect
to a dividend payment date means the product of (x) 97% and (y) the closing bid
price for the common stock as reported by the Nasdaq National Market, or the
principal securities exchange or other securities market on which the common
stock is then being traded, on the fourth Trading Day (as defined) preceding
such dividend payment date. "Trading Day" means any day on which the common
stock is traded for any period on the Nasdaq National Market (or on the
principal securities exchange or other securities market on which the common
stock is then being traded).

         "Specified Indentures" means each of the following: (i) the Indenture
dated October 23, 1995 governing the 14% Senior Discount Notes Due 2005 of
WinStar; (ii) the Indenture dated as of March 1, 1997, governing the 14 1/2%
Senior Deferred Interest Notes Due 2005 of WinStar; (iii) the Indenture dated as
of March 1, 1997, governing the 12 1/2% Senior Secured Notes Due 2004 of WinStar
Equipment Corp.; (iv) the Indenture dated as of August 1, 1997, governing the 12
1/2% Senior Secured Notes Due 2004 of WinStar Equipment II Corp.; (v) the
Indenture dated as of October 1, 1997, governing the 15% Senior Subordinated
Deferred Interest Notes Due 2007 of WinStar; (vi) the Indenture dated as of
March 15, 1998, governing the 10% Senior Subordinated Notes Due 2008 of WinStar;
(vii) the Indenture dated as of March 15, 1998, governing the 11% Senior
Subordinated Deferred Interest Notes Due 2008 of WinStar and (viii) the
Indenture to be entered into with respect to the 14 1/4% Senior Subordinated
Deferred Interest Notes Due 2007 of WinStar that may be issued upon exchange for
the Series C 14 1/4% Senior Cumulative Exchangeable Preferred Stock Due 2007 of
WinStar.

         No dividend whatsoever will be declared or paid upon, or any sum set
apart for the payment of dividends upon, any outstanding share of the Series F
preferred stock with respect to any dividend period unless all dividends for all
preceding dividend periods have been declared and paid or declared and a
sufficient sum set apart for the payment of such dividend, upon all outstanding
shares of Series F preferred stock.

         The Company will not (i) declare, pay or set apart funds for the
payment of any dividend or other distribution with respect to any Junior Stock
or (ii) redeem, purchase or otherwise

                                       39
<PAGE>

acquire for consideration any Junior Stock through a sinking fund or otherwise,
unless (A) all accrued and unpaid dividends with respect to the Series F
preferred stock and any Parity Stock at the time such dividends are payable have
been paid or funds have been set apart for payment of such dividends and (B)
sufficient funds have been paid or set apart for the payment of the dividend for
the current dividend period with respect to the Series F preferred stock and any
Parity Stock.

         No dividend will be declared or paid on any Parity Stock unless full
cumulative dividends have been paid on the Series F preferred stock for all
prior dividend periods; provided, however, if accrued dividends on the Series F
preferred stock for all prior dividend periods have not been paid in full then
any dividend declared for any dividend period on the Series F preferred stock
and on any Parity Stock will be declared ratably in proportion to accrued and
unpaid dividends on the Series F preferred stock and such Parity Stock.

         Notwithstanding anything herein to the contrary, the Company may
declare and pay dividends on Parity Stock or Junior Stock which are payable
solely in shares of Parity Stock or Junior Stock (in the case of Parity Stock)
or of Junior Stock (in the case of Junior Stock) or by the increase in the
liquidation value of Parity Stock or Junior Stock, as applicable, or repurchase,
redeem or otherwise acquire Junior Stock in exchange for Junior Stock and Parity
Stock in exchange for Parity Stock or Junior Stock.

         The Company's ability to pay cash dividends with respect to the Series
F preferred stock is limited by the terms of our outstanding indebtedness and by
certain preferred stock. Even if the terms of the instruments governing our
indebtedness and preferred stock allow us to pay cash dividends and to redeem
the Series F preferred stock, we can make such payments only from our "surplus"
(the excess of our total assets over the sum of our liabilities plus the par
value of our outstanding capital stock our capital) and we cannot assure you
that we will have any surplus. Moreover, without surplus, we cannot pay
dividends in shares of our common stock. See "Risk Factors-We are restricted
from paying cash dividends and from redeeming the Series F preferred stock. We
also could be prevented from paying dividends in shares of our common stock."

Optional Redemption

         The Series F preferred stock is not redeemable at the option of the
Company prior to June 24, 2002. Thereafter, each share of the Series F preferred
stock will be redeemable, at the Company's option, in whole or in part, at any
time or from time to time, upon not less than 30 nor more than 60 days' prior
notice mailed by first-class mail to each Holder's registered address, at the
following redemption prices, payable in cash, plus accumulated and unpaid
dividends, if any (including a prorated dividend for any partial dividend
period).

         If redeemed during the 12-month period commencing on June 15 (or, if
such date is a Saturday, Sunday or business holiday, then on the next business
day immediately thereafter) of the years set forth below, the redemption prices
shall be:

                                       40
<PAGE>

Period                                                        Redemption Price
- ------                                                        ----------------

2002.................................................            $1,018.13
2003.................................................             1,012.08
2004.................................................             1,006.04
2005 and thereafter..................................             1,000.00

         In the case of any partial optional redemption, selection of the Series
F preferred stock for redemption will be made by the Company in compliance with
the requirements of the principal national securities exchange, if any, on which
the Series F preferred stock is listed, or if the Series F preferred stock is
not listed on a national securities exchange, on a pro rata basis, by lot or
such other method as the Company, in its sole discretion, shall deem fair and
appropriate; provided, however, that the Company may redeem all the shares held
by holders of fewer than five shares (or all of the shares held by the holders
who would hold fewer than five shares as a result of such redemption) as may be
determined by the Company.

         In the case of a redemption date falling after a dividend payment
record date and prior to the related payment date, the holders of the Series F
preferred stock at the close of business on such record date will be entitled to
receive the dividend payable on such shares on the corresponding dividend
payment date, notwithstanding the redemption of such shares following such
dividend payment record date. Except as provided for in the preceding sentence,
no payment or allowance will be made for accrued dividends on any shares of
Series F preferred stock called for redemption.

         The Company's ability to redeem the Series F preferred stock at its
option is limited by the terms of the Company's outstanding indebtedness. The
Company may not be able to redeem the Series F preferred stock at its option
unless it simultaneously redeems or repays such indebtedness. See "Risk
Factors--We are restricted from paying cash dividends and from redeeming the
Series F preferred stock. We also could be prevented from paying dividends in
shares of our common stock."

Liquidation Preference

         Upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Company, each holder of Series F preferred stock is entitled
to be paid, out of the assets of the Company available for distribution to
stockholders, an amount equal to the liquidation preference of $1,000 per share
of Series F preferred stock held by such holder, plus accumulated and unpaid
dividends thereon to the date fixed for liquidation, dissolution or winding-up
before any distribution is made on any Junior Stock, including common stock of
the Company. If, upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Company, the amounts payable with respect to the Series F
preferred stock and all other Parity Stock are not paid in full, the holders of
the Series F preferred stock and the Parity Stock will share equally and ratably
in any distribution of assets of the Company in proportion to the full
liquidation preference and accumulated and unpaid dividends to which they are
entitled, the holders of shares of Series F preferred stock are not entitled to
any further participation in any distribution of assets of the Company. However,
neither the sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other

                                       41
<PAGE>

consideration) of all or substantially all the property or assets of the Company
nor the consolidation or merger of the Company with one or more entities shall
be deemed to be a liquidation, dissolution or winding-up of the Company.

         The Certificate of Designations will not contain any provision
requiring funds to be set aside to protect the liquidation preference of the
Series F preferred stock even though it is substantially in excess of the par
value thereof.

Voting Rights

         The holders of Series F preferred stock, except as otherwise required
under Delaware law or as provided in the Certificate of Designations, are not
entitled or permitted to vote on any matter required or permitted to be voted
upon by the stockholders of the Company.

         The Certificate of Designations provide that if dividends on the Series
F preferred stock are in arrears and unpaid for six or more dividend periods
(whether or not consecutive) then the holders of the outstanding shares of
Series F preferred stock, voting together as a class with the holders of any
other series of preferred stock upon which like rights have been conferred and
are exercisable, will be entitled to elect to serve on the Board of Directors
the lesser of (x) two additional members to the Board of Directors or (y) that
number of directors constituting at least 25% of the members of the Board of
Directors, and the number of members of the Board of Directors will be
immediately and automatically increased by such number. Such voting rights of
the Series F preferred stock will continue until such time as all dividends in
arrears on the Series F preferred stock are paid in full at which time the term
of any directors elected pursuant to the provisions of this paragraph (subject
to the right of holders of any other preferred stock to elect such directors)
shall terminate.

         The Certificate of Designations also provide that, except as expressly
set forth above under "--Ranking," (a) the creation, authorization or issuance
of any shares of Junior Stock, Parity Stock or Senior stock, including the
designation of a series thereof within the existing class of Series F preferred
stock, or (b) the increase or decrease in the amount of authorized capital stock
of any class, including any preferred stock, does not require the consent of the
holders of Series F preferred stock and shall not be deemed to affect adversely
the rights, preferences, privileges or voting rights of shares of Series F
preferred stock.

Conversion Rights

         Shares of Series F preferred stock are convertible, in whole or in
part, at any time after the issue date, at the option of the holders thereof,
into conversion shares at the conversion price of $61.96, subject to adjustment
as described below ("Conversion Price"). The right to convert shares of Series F
preferred stock called for redemption terminates at the close of business on the
relevant redemption date.

         We have the option to convert all of the shares of Series F preferred
stock into conversion shares at the Conversion Price if, on or after June 24,
2002, the closing price of our common stock has equaled or exceeded 130% of the
Conversion Price for at least 20 out of 30 consecutive days on which the Nasdaq
National Market is open for the transaction of business.

                                       42
<PAGE>

         Conversion of shares of Series F preferred stock, or a specified
portion thereof, may be effected by delivering certificates evidencing such
shares, together with written notice of conversion and a proper assignment of
such certificates to the Company or in blank, to the office or agency to be
maintained by the Company for that purpose. Initially such office will be
located at 230 Park Avenue, New York, N.Y.

         Each conversion will be deemed to have been effected immediately prior
to the close of business on the date on which the certificates for shares of
Series F preferred stock shall have been surrendered and notice (and if
applicable, payment of an amount equal to the dividends payable on such shares)
received by the Company as aforesaid. The Company will issue a certificate
evidencing the common stock distributed upon conversion as soon as reasonably
practical after the conversion date.

         With respect to any shares of Series F preferred stock that are
"restricted securities" on the conversion date, the conversion shares
distributed upon conversion will be treated as "restricted securities," will
bear a legend to such effect and will not be transferable by the recipient
thereof except pursuant to an effective registration statement or pursuant to an
exemption from the registration requirements of the Securities Act. All such
conversion shares will be issued in physical certificated form and will not be
eligible for receipt in global form through the facilities of the Depositary.
With respect to shares of Series F preferred stock that are no longer
"restricted securities" on a conversion date, either as a result of a resale of
the Series F preferred stock pursuant to the Shelf Registration Statement or
otherwise, all conversion shares distributed upon conversion will be freely
transferable without restriction under the Securities Act (other than by
affiliates), and such conversion shares will be eligible for receipt in global
form through the facilities of the Depositary.

         Holders of shares of Series F preferred stock at the close of business
on a dividend payment record date are entitled to receive the dividend payable
on such shares on the corresponding dividend payment date notwithstanding the
conversion of such shares following the dividend payment record date and prior
to such dividend payment date. However, shares of Series F preferred stock
surrendered for conversion during the period between the close of business on
any dividend payment record date and the opening of business on the
corresponding dividend payment date (except shares converted after the issuance
of a notice of redemption with respect to a redemption date during such period,
which will be entitled to such dividend) must be accompanied by payment of an
amount equal to the dividend payable on such shares on such dividend payment
date. A holder of shares of Series F preferred stock on a dividend payment
record date who (or whose transferee) tenders any such shares for conversion
into conversion shares on such dividend payment date will receive the dividend
payable by the Company on such shares of Series F preferred stock on such date,
and the converting holder need not include payment of the amount of such
dividend upon surrender of shares of Series F preferred stock for conversion.
Except as provided above, the Company will make no payment or allowance for
unpaid dividends, whether or not in arrears, on converted shares or the
dividends on the conversion shares issued upon such conversion.

         Fractional shares of common stock need not be issued upon conversion
but, in lieu thereof, the Company may pay a cash adjustment based on the current
market price of the common stock on the date prior to such conversion date.

                                       43
<PAGE>

         The Conversion Price is subject to adjustment, under certain
circumstances, upon the occurrence of certain events, including:

         o        the payment of dividends (and other distributions) of common
                  stock on outstanding shares of common stock;

         o        the issuance to all holders of common stock of rights,
                  warrants or options entitling them to subscribe for or
                  purchase common stock at less than the current market price
                  (as defined) thereof;

         o        the subdivision or combination of our common stock;

         o        distributions to all holders of common stock of evidences of
                  indebtedness of the Company, shares of capital stock,
                  securities, cash or property (excluding any rights, warrants
                  or options referred to in the second bulletpoint above and any
                  dividend or distribution paid exclusively of cash to all
                  holders of common stock in an aggregate amount that, together
                  with (A) other all-cash distributions made within the
                  preceding 12 months and (B) any cash and the fair market
                  value, as of the expiration of the tender or exchange offer
                  referred to below, of consideration payable in respect of any
                  tender or exchange offer by the Company or a subsidiary of the
                  common stock concluded within the preceding 12 months, exceeds
                  12.5% of the Company's aggregate market capitalization (such
                  aggregate market capitalization being the product of the
                  current market price of the common stock multiplied by the
                  number of shares of common stock then outstanding) on the date
                  of such distribution; and

         o        the successful completion of a tender or exchange offer made
                  by the Company or any subsidiary for the common stock which
                  involves an aggregate consideration that, together with (X)
                  any cash and the fair market value of other consideration
                  payable in respect of any preceding 12 months and (Y) the
                  aggregate amount of any all-cash distribution to all holders
                  of the Company's common stock made within the preceding 12
                  months, exceeds 12.5% of the Company's aggregate market
                  capitalization on the expiration of such tender or exchange
                  offer.

         No adjustment of the Conversion Price is required to be made until
cumulative adjustments amount to 1% or more of the Conversion Price as last
adjusted.

         Notwithstanding any other provision in the preceding paragraphs to the
contrary, if any Change in Control (as defined) occurs, then the Conversion
Price in effect will be adjusted immediately after such Change in Control as
described below. In addition, in the event of a Common Stock Change in Control
(as defined), each share of the Series F preferred stock shall be convertible
solely into common stock of the kind received by holders of common stock as the
result of such Common Stock Change in Control.

         A "Change in Control" shall be deemed to have occurred at such time as
(i) the sale, lease, transfer, conveyance or other disposition (other than by
way of merger or consolidation), in one or a series of related transactions, of
all or substantially all the assets of the Company and its

                                       44
<PAGE>

subsidiaries taken as a whole to any "person" (as such term is used in Section
13(d)(3) of the Exchange Act), (ii) the adoption of a plan relating to the
liquidation or dissolution of the Company, (iii) the consummation or any
transaction (including any merger or consolidation) the result of which is that
any "person" (as defined above) other than William J. Rouhana, Jr., becomes the
beneficial owner (as such term is defined in Rules 13d-3 and 13d-5 promulgated
under the Exchange Act, except that a person will be deemed to have beneficial
ownership of all shares that such person has the right to acquire whether such
right is exercisable immediately or only after the passage of time), directly or
indirectly, of more than 50% of the voting stock of the Company or (iv) the
first day on which a majority of the members of the board of directors are not
Continuing Directors (as defined in the Certificate of Designations).

         The term "Common Stock Change in Control" means any Change in Control
in which more than 50% of the value (as determined in good faith by the Board of
Directors of the Company) or the consideration received by holders of common
stock consists of common stock of another company that for each of the 10
consecutive Trading Days referred to in the definition of "Applicable Price"
below has been admitted for listing or admitted for listing subject to notice of
issuance on a national securities exchange or quoted on the Nasdaq National
Market; provided, however, that a Change in Control shall not be a Common Stock
Change in Control unless either (i) the Company continues to exist after the
occurrence of such Change in Control and the outstanding shares of Series F
preferred stock continue to exist as outstanding shares of Series F preferred
stock, or (ii) not later than the occurrence of such Change in Control, the
outstanding shares of Series F preferred stock are converted into or exchanged
for shares of Series F preferred stock of a corporation succeeding to the
business of the Company, which convertible preferred stock has powers
preferences and relative, participating, optional or other rights, and
qualification, limitations and restrictions, substantially similar to those of
the Series F preferred stock.

         The term "Non-Stock Change in Control" means any Change in Control
other than a Common Stock Change in Control.

         The term "Applicable Price" means (i) in the event of a Non-Stock
Change in Control in which the holders of the common stock receive only cash,
the amount of cash received by the holder of one share of common stock and (ii)
in the event of any other Non-Stock Change in Control or any Common Stock Change
in Control, the average of the closing bid prices for the common stock during
the 10 Trading Days prior to and including the record date for the determination
of the holders of common stock entitled to receive cash, securities, property or
other assets in connection with such Non-Stock Change in Control or Common Stock
Change in Control or, if there is no such cash, securities, property or other
assets or the date upon which such Non-Stock Change in Control is deemed to have
occurred, as the case may be, in each case as adjusted in good faith by the
Board of Directors to appropriately reflect any of the events referred to in
clauses (i) through (vi) of the sixth paragraph of this subsection.

         For purposes of calculating any adjustment to be made in the event of a
Change of Control, immediately after such Change in Control:

         o        in the case of a Non-Stock Change in Control, the Conversion
                  Price will thereupon become the lower of (A) the Conversion
                  Price in effect immediately prior to such

                                       45
<PAGE>

                  Non-Stock change in Control, but after giving effect to any
                  other prior adjustments, and (B) the results obtained by
                  multiplying the greater of the Applicable Price and the then
                  applicable Reference Market Price (as defined) by a fraction
                  of which the numerator will be $1,000.00 and the denominator
                  will be the then current redemption price per share or, prior
                  to June 24, 2002, an amount per share of Series F preferred
                  stock determined by the Company in its sole discretion, after
                  consultation with an investment banking firm, to be the
                  equivalent of the hypothetical redemption price that would
                  have been applicable if the Series F preferred stock had been
                  redeemable during such period; provided, however, that if, as
                  a result of the operation of this clause (i), the cumulative
                  number of shares of common stock issued or issuable upon
                  conversion of the Series F preferred stock, after giving
                  effect to the adjustment described in this clause (i) and all
                  prior conversions for Series F preferred stock, would exceed a
                  number (the "Threshold Number") equal to 20% of the
                  outstanding shares of common stock as of the issue date of the
                  Series F preferred stock, then until and unless the Company
                  obtains the approval of its common stockholders for the
                  issuance of any shares of common stock in excess of the
                  Threshold Number, the Conversion Price shall be adjusted
                  pursuant to this clause (i) to that price that would entitle
                  the holders of Series F preferred stock to receive in the
                  aggregate, upon conversion for all the Series F preferred
                  stock (including all prior conversions of Series F preferred
                  stock), no more than the Threshold Number of shares of common
                  stock; and

         o        in the case of a Common Stock Change in Control, the
                  Conversion Price in effect immediately prior to such Common
                  Stock Change in Control, but after giving effect to any other
                  prior adjustments, will thereupon be adjusted by multiplying
                  such Conversion Price by a fraction, of which the numerator
                  will be the Purchaser Stock Price (as defined) and the
                  denominator will be the Applicable Price; provided, however,
                  that in the event of a Common Stock Change in Control in which
                  (A) 100% of the value of the consideration received by a
                  holder of common stock is common stock of the successor,
                  acquiror or other third party (and cash, if any, is paid with
                  respect to any fractional interests is such common stock
                  resulting from such Common Stock Change in Control) and (B)
                  all the common stock of the Company will have been exchanged
                  for, converted into, or acquired for, common stock (and cash
                  with respect to fractional interests) of the successor,
                  acquiror or other third party, the Conversion Price in effect
                  immediately prior to such Common Stock Change in Control will
                  thereupon be adjusted by multiplying such Conversion Price by
                  a fraction, of which the numerator will be one (1) and the
                  denominator will be the number of shares of common stock of
                  the successor, acquiror, or other third party received by a
                  holder of one share of common stock of the Company as a result
                  of such Common Stock Change in Control.

         The foregoing Conversion Price adjustments in the event of a Non-Stock
Change in Control apply in situations whereby a Change in Control not involving
a change in beneficial ownership of the common stock has occurred or whereby all
or substantially all of the common stock of the Company is acquired in a
transaction in which 50% or less of the value received by holders of such common
stock consists of common stock that has been admitted for listing on a national
securities exchange or quoted on the Nasdaq National Market. If the market price
of the

                                       46
<PAGE>

common stock of the Company immediately prior to a Non-Stock Change in Control
is lower that the applicable Conversion Price then in effect, the Conversion
Price will be adjusted as described in (i) above and the holders of the Series F
preferred stock will be entitled to received the amount and kind of
consideration that would have been received if the Series F preferred stock had
been converted into common stock prior to the Non-Stock Change in Control after
giving effect to such adjustment.

         The foregoing Conversion Price adjustments in the event of a Common
Stock Change in Control apply in situations whereby more than 50% of the value
received by holders of common stock of the Company consists of common stock of
another company that has been admitted for listing on a national securities
exchange or quoted on the Nasdaq National Market, in which case the Series F
preferred stock will become convertible into shares of common stock of the other
company. If consideration for the common stock of the Company consists partly of
common stock of another company and partly of other securities, cash or
property, each share of Series F preferred stock will be convertible solely into
a number of shares of such common stock determined so that the initial value of
such shares (measured as described in the definition of Purchaser Stock Price)
equals the value of the shares of common stock into which such share of Series F
preferred stock was convertible immediately before the transaction (measured as
described in the definition of Purchase Stock Price) equal the value of the
shares of common stock into which such share of Series F preferred stock was
convertible immediately before the transaction (measured as described in the
definition of Applicable Price). If consideration for common stock of the
Company is solely common stock of another company, each share of Convertible
Preferred is convertible into the same number of shares of such common stock of
another company receivable by a holder of the number of shares of common stock
of the Company into which such share of Series F preferred stock was convertible
immediately before such transaction.

         The term "Purchaser Stock Price" means, with respect to any Common
Stock Change in Control, the product of (i) the number of shares of common stock
received as consideration in such Common Stock Change of Control for each share
of common stock of the Company, and (ii) the average of the per share closing
prices for the common stock received as consideration in such Common Stock
Change in Control for the 10 consecutive trading days prior to and including the
record date for the determination of the holders of common stock entitled to
received such common stock of the Company shall have the right to receive such
common stock, in each case, as adjusted in good faith by the Board of Directors
to appropriately reflect any of the events referred to in the six bulletpoints
above; provided, however, that if no such closing prices exist, then the
Purchaser Stock Price shall be set at a price determined in good faith by the
Board of Directors of the Company.


         The term "Reference Market Price" shall initially mean $33.58 (which
is an amount equal to 66 2/3% of the reported last sale price for the common
stock on the Nasdaq National Market on June 16, 1999, the date immediately
preceding the date of issuance of the Series F preferred stock), and in the
event of any adjustment to the Conversion Prices other than as a result of a
Change in Control, the Reference Market Price shall also be adjusted so that the
ratio of the Reference Market Price to the Conversion Price after giving effect
to any such adjustment shall always be the same as the ratio of $33.58 to
the initial Conversion Price set forth on the cover page of this Prospectus.


                                       47
<PAGE>


         Depending upon whether the Change in Control is a Non-Stock Change in
Control or Common Stock Change in Control, a holder may receive significantly
different consideration upon conversion. In the event of a Non-Stock change in
Control, the holder has the right to convert each share of the Series F
preferred stock into the kind and amount of the shares of stock and other
securities or property or assets receivable by a holder of the number of shares
of common stock issuable upon conversion of such share of the Series F preferred
stock immediately prior to such Non-Stock Change in Control, but after giving
effect to the adjustment described above. However, in the event of a Common
Stock Change in Control in which less than 100% of the value of the
consideration received by a holder of common stock is common stock of the
acquiror or other third party, a holder of a share of Series F preferred stock
who converts a share following the Common Stock Change in Control will receive
consideration in the form of such common stock only, whereas a holder who has
converted their shares prior to the Common Stock Change in Control will
receive consideration in the form of common stock as well as any other
securities or assets (which may include cash) receivable thereupon by a holder
of the number of shares of common stock issuable upon conversion of such share
of Series F preferred stock immediately prior to such Common Stock Change in
Control.


         In the case of certain reclassifications, consolidations, mergers,
sales or transfers of assets or other transactions pursuant to which the common
stock is converted into the right to receive other securities, cash or other
property, each share of Series F preferred stock then outstanding, without the
consent of any holders of Series F preferred stock, becomes convertible only
into the kind and amount of securities, cash and other property receivable upon
the transaction by a holder immediately prior to such transaction if such holder
had converted its share of Series F preferred stock.

         If at any such time the Company makes a distribution of property to its
stockholders that is taxable to such stockholders as a dividend for federal
income tax purposes (for example, distributions or evidences of indebtedness or
assets of the Company, but generally not stock dividends or rights to subscribe
for capital stock) and, pursuant to the antidilution provisions described above,
the Conversion Price of the Series F preferred stock is reduced, such reduction
would be deemed to be the receipt of taxable income by holders of the Series F
preferred stock.

Consolidation, Merger and Sale of Assets

         The Certificate of Designations will provide that the Company, without
the consent of the holders of any of the outstanding Series F preferred stock,
may consolidate with or merge into any other Person or convey, transfer or lease
its properties and assets substantially as an entirety to any Person or may
permit any Person to consolidate with or merge into, or transfer or lease its
properties substantially as an entirety to, the Company; provided, however that
(a) the successor, transferee or lessee is organized under the laws of a United
States jurisdiction; (b) the shares of Series F preferred stock shall become
shares of such successor, transferee or lessee, having in respect of such
successor, transferee or lessee the same powers, preferences and relative
participating, optional or other special rights and the qualification,
limitations or restrictions thereon, the Series F preferred stock had
immediately prior to such transaction; and (c) certain other conditions are met.

                                       48
<PAGE>

         Under any consolidation by the Company with, or merger by the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety as described in the
preceding paragraph, the successor resulting from such consolidation or into
which the Company is merged or the transferee or lessee to which such
conveyance, transfer or lease is made, will succeed to, and be substituted for,
and may exercise every right and power of, the Company under the shares of
Series F preferred stock, and thereafter, except in the case of a lease, the
predecessor (if still in existence) will be released from its obligations and
covenants with respect to the Series F preferred stock.

Restrictions on Transfer

         The Series F preferred stock, and any shares of common stock
distributed pursuant to a dividend payment on or conversion of the Series F
preferred stock may not be sold or otherwise transferred until the expiration of
two years following the date of payment for and delivery of the Series F
preferred stock, except pursuant to registration under the Securities Act or in
accordance with Rule 144 (if available), Rule 144A (if available) or Rule 904
thereunder, and will bear a legend to this effect.

SEC Reports and Reports to Holders


         Whether or not the Company is required to file reports with the SEC, if
any shares of Series F preferred stock are outstanding, the Company shall file
with the SEC all such reports and other information as it would be required to
file with the SEC by Sections 13(a) or 15(d) under the Exchange Act. See "Where
You Can Find More Information" on page 3. The Company shall supply each Holder
of Series F preferred stock, upon request, without cost to such Holders, copies
of such reports or other information.


Transfer Agent, Registrar and Dividend Disbursing Agent

         The transfer agent, registrar, dividend disbursing agent and redemption
agent for the shares of Series F preferred stock will be Continental Stock
Transfer & Trust Company.

Registration Rights

         The Company has agreed pursuant to the Registration Rights Agreement,
for the benefit of the holders of the Series F preferred stock, the dividend
shares and the conversion shares (collectively, the "Restricted Securities")
that the Company will, at its cost:

         o        on or prior to September 1, 1999, file a Registration
                  Statement (a "Shelf Registration Statement") covering resales
                  and/or issuances of the Restricted Securities pursuant to Rule
                  415 under the Securities Act;

         o        on or prior to November 15, 1999, cause the Shelf Registration
                  Statement to be declared effective under the Securities Act;
                  and

         o        use its best efforts to keep the Shelf Registration Statement
                  effective until such time as the Restricted Securities are
                  eligible to be sold under Rule 144(k) under the

                                       49
<PAGE>

                  Securities Act or until all the Restricted Securities have
                  been sold pursuant to such Shelf Registration Statement.

The Company will, in the event a Shelf Registration Statement is filed, among
other things, provide to each holder for whom such Shelf Registration Statement
was filed, copies of the Prospectus which is a part of the Shelf Registration
Statement, notify each such holder when the Shelf Registration Statement has
become effective and take certain other actions as are required to permit
unrestricted resales of such Restricted Securities. A holder selling such
securities pursuant to the Shelf Registration Statement generally would be
required to be named as a selling securityholder in the related prospectus and
to deliver a prospectus to purchasers, will be subject to certain of the civil
liability provisions under the Securities Act in connection with such sales and
will be bound by the provisions of the Registration Rights Agreement which are
applicable to such holder (including certain indemnification obligations).

         If (i) by November 15, 1999 (or the next business day), the Shelf
Registration Statement has not been declared effective by the SEC; or (ii) after
the Shelf Registration Statement has been declared effective, such Registration
Statement ceases to be effective or usable (subject to certain exceptions) in
connection with resales of the Restricted Securities in accordance with and
during the periods specified in the Registration Rights Agreement (each such
event referred to in clauses (i) and (ii) a "Registration Default"), dividends
will accrue on the Series F preferred stock at the rate of 9 1/4% per annum (200
basis points above the rate shown on the cover page of this Prospectus), from
and including the date on which any such Registration Default shall occur to but
excluding the date on which all Registration Defaults have been cured. At all
other times, dividends accrue on the Series F preferred stock at a rate of
7 1/4% per annum.

         If a Registration Default occurs and is continuing on a record date in
respect of a dividend payment date on which dividends are to be paid in dividend
shares, then such dividends shall not be paid on such dividend payment date but
shall be paid on a subsequent payment date, determined by the Company, which
shall be a date after all Registration Defaults have been cured or all the
common stock to be paid in respect of such deferred dividends are eligible to be
sold under Rule 144(k) under the Securities Act. The Discounted Current Market
Value of the common stock with respect to such subsequent payment date shall be
determined on the fourth Trading Day prior to such subsequent payment date, and
dividends accrued from the last date as to which dividends have been paid until
such subsequent payment date (including dividends at the higher rate described
above for the period during which a Registration Default was continuing) shall
be paid to the holders of record on the Business Day next preceding such
subsequent payment date.

         THE REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS FORMS PART HAS BEEN
FILED BY US PURSUANT TO THE FORGOING REGISTRATION OBLIGATION.

         The following summary of some of the provisions of the Registration
Rights Agreement does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all the provisions of the
Registration Rights Agreement, a copy which is available upon request to the
Company.

                                       50
<PAGE>

Book-Entry, Delivery and Form

         The Series F preferred stock sold is issued in the form of one or more
global securities. The global securities are deposited with, or on behalf of,
the Depositary and registered in the name of the Depositary or its nominee.
Except as set forth below, the global securities may be transferred, in whole
and not in part, only to the Depositary or another nominee of the Depositary.
Investors may hold their beneficial interests in the global securities directly
through the Depositary if they have an account with the Depositary or indirectly
through organizations which have accounts with the Depositary.

         Shares of Series F preferred stock that are issued as described below
under "Certificated Series F preferred stock" will be issued in definitive form.
Upon the transfer of Series F preferred stock in definitive form, such Series F
preferred stock will, unless the global securities has previously been exchanged
for Series F preferred stock in definitive form, be exchanged for an interest in
the global securities representing the liquidation preference of Series F
preferred stock being transferred.

         The Depositary has advised the Company as follows: The Depositary is a
limited-purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. The
Depositary was created to hold securities of institutions that have accounts
with the Depositary ("participants") and to facilitate the clearance and
settlement of securities transactions among its participants in such securities
through electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depositary's participants include securities brokers and dealers (which may
include the initial purchasers), banks, trust companies, clearing corporations
and certain other organizations. Access to the Depositary's book-entry system is
also available to others such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a participant,
whether directly or indirectly.

         Upon the issuance of the global securities, the Depositary will credit,
on its book-entry registrations and transfer system, the liquidation preference
of the Series F preferred stock represented by such global securities to the
accounts of participants. The accounts to be credited shall be designated by the
Initial Purchasers of such Series F preferred stock. Ownership of beneficial
interests in the global securities will be limited to participants or persons
that may hold interests through participants. Ownership of beneficial interests
in the global securities will be shown on, and the transfer of those ownership
interests will be effected only through, records maintained by the Depositary
(with respect to participants' interest) and such participants (with respect to
the owners of beneficial interests in the global securities other than
participants). The laws of some jurisdictions may require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and laws may impair the ability to transfer or pledge
beneficial interests in the global securities.

         So long as the Depositary, or its nominee, is the registered holder and
owner of the global securities, the Depositary or such nominee, as the case may
be, will be considered the sole legal owner and holder of the related Series F
preferred stock for all purposes of such Series F

                                       51
<PAGE>

preferred stock and the Certificate of Designations. Except as set forth below,
owners of beneficial interest in the global securities will not be entitled to
have the Series F preferred stock represented by the global securities
registered in their names, will not receive or be entitled to receive physical
delivery of certificated Series F preferred stock in definitive form and will
not be considered to be the owners or holders of any Series F preferred stock
under the global securities. The Company understands that under existing
industry practice, in the event an owner of a beneficial interest in the global
securities desires to take any action that the Depositary, as the holder of the
global securities, is entitled to take, the Depositary will authorize the
participants to take such action, and that the participants will authorize
beneficial owners owning through such participants to take such action, or would
otherwise act upon the instructions of beneficial owners owning through them.

         Payment in respect of dividends and redemption payments on Series F
preferred stock represented by the global securities registered in the name of
and held by the Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner and holder of the global
securities.

         The Company expects that the Depositary or its nominee, upon receipt of
any payment in respect of dividends and redemption payments on the global
securities, will credit participants' accounts with payments in amount
proportionate to their respective beneficial interests in the liquidation
preference of the global securities as shown on the records of the Depositary or
its nominee. The Company also expects that payments by participants to owners of
beneficial interest in the global securities held through such participants will
be governed by standing instructions and customary practices and will be the
responsibility of such participants. The Company will not have any
responsibility or liability for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests in the global
securities for any Series F preferred stock or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interest or for any
other aspect of the relationship between the Depositary and its participants or
the relationship between such participants and the owners of beneficial interest
in the global securities owning through such participants.

         Unless and until it is exchanged in whole or in part for certificated
Series F preferred stock in definitive form, the global securities may not be
transferred except as a whole (a) by the Depositary to a nominee of the
Depositary, (b) by a nominee of the Depositary to the Depositary or (c) by a
nominee of the Depositary to another nominee of the Depositary.

         Although the Depositary has agreed to the foregoing procedures in order
to facilitate transfers of interests in the global securities among participants
of the Depositary, it is under no obligations to perform or continue to perform
such procedures, and such procedures may be discontinued at any time. Neither
the transfer agent nor the Company will have any responsibility for the
performance by the Depositary or its participants or indirect participants of
their respective obligations under the rules and procedures governing their
operations.

                                       52
<PAGE>

Certificated Series F Preferred Stock

         The Series F preferred stock represented by the global securities is
exchangeable for certificated Series F preferred stock in definitive form of
like tenor as such Series F preferred stock if (i) the Depositary notifies the
Company that it is unwilling or unable to continue as Depositary for the global
securities and a successor is not promptly appointed or if at any time the
Depositary ceases to be a clearing agency registered under the Exchange Act or
(ii) the Company in its discretion at any time determines not to have all of the
Series F preferred stock represented by the global securities. Any Series F
preferred stock that is exchangeable pursuant to the preceding sentence is
exchangeable for certificated Series F preferred stock issuable in authorized
denominations and registered in such names as the Depositary shall direct.
Subject to the foregoing, the global securities are not exchangeable, except for
global securities of the same aggregate denominations to be registered in the
name of the Depositary or its nominee. In addition, such certificates will bear
the legend referred to under "Description of the Series F Preferred
Stock-Restrictions on Transfer" (unless the Company determines otherwise in
accordance with applicable law) and subject to the provisions of such legend.

                                       53
<PAGE>

              DESCRIPTION OF CERTAIN INDEBTEDNESS AND CAPITAL STOCK

Indebtedness

         1995 Debt Placement

         In October 1995, we issued an aggregate of $225.0 million of notes
consisting of (1) $150.0 million of 14% Senior Discount Notes due 2005 (the
"1995 Senior Notes") and (2) $75.0 million of 14% Convertible Senior
Subordinated Discount Notes due 2005 (the "Convertible Notes"). On June 2, 1999,
all of the Convertible Notes automatically converted into approximately
5,928,000 shares of our common stock pursuant to their terms.

         The 1995 Senior Notes are unsecured, senior indebtedness, rank in
parity in right of payment with all of our existing and future senior
indebtedness and are senior in right of payment to all existing and future
subordinated indebtedness. The 1995 Senior Notes will not accrue interest prior
to October 15, 2000, nor pay cash interest prior to April 15, 2001; however, the
principal value of the 1995 Senior Notes has accreted since issuance and, at
October 15, 2000, the 1995 Senior Notes will have an aggregate principal amount
of $294.2 million. From and after October 15, 2000, the 1995 Senior Notes will
accrue interest at the rate of 14% per annum, payable semiannually in cash
commencing April 15, 2001. The 1995 Senior Notes mature on October 15, 2005.

         1997 Debt Placements

         In March 1997, we and WinStar Equipment Corp. ("WEC"), one of our
subsidiaries formed to facilitate the purchase of equipment, issued an aggregate
of $300.0 million of notes, consisting of (1) $100.0 million of our 14 1/2%
Senior Deferred Interest Notes Due 2005 (the "1997 Senior Notes"), ranking pari
passu with the 1995 Senior Notes, and (2) $200.0 million of WEC's 12 1/2%
Guaranteed Senior Secured Notes Due 2004 (the "WEC Notes"). In August 1997,
WinStar Equipment II Corp. ("WEC II"), another of our subsidiaries formed to
purchase equipment, issued $50.0 million of its 12 1/2% Guaranteed Senior
Secured Notes Due 2004 (the "WEC II Notes"). In October 1997, we issued an
aggregate of $100.0 million principal amount of our 15% Senior Subordinated
Deferred Interest Notes Due 2007 (the "1997 Senior Subordinated Notes" and,
together with the 1997 Senior Notes, the WEC Notes and the WEC II Notes, the
"1997 Notes").

         The 1997 Senior Notes are unsecured senior indebtedness, rank in parity
in right of payment with all of our existing and future unsecured senior
indebtedness, and are senior in right of payment to all our existing and future
subordinated indebtedness. Until October 15, 2000, interest on the 1997 Senior
Notes will accrue and compound semiannually at a rate of 14 1/2%, but will not
be payable in cash. Interest on the Accumulated Amount (as defined in the
indenture governing the 1997 Senior Notes) of the 1997 Senior Notes as of
October 15, 2000 will be payable semiannually in cash on April 15 and October 15
of each year commencing April 15, 2001. The 1997 Senior Notes mature on October
15, 2005 and are redeemable on or after October 15, 2000, at our option, in
whole or in part, at specified prices.

                                       54
<PAGE>

         The WEC Notes bear interest at a rate of 12 1/2% per annum, payable on
March 15 and September 15, commencing September 15, 1997. The WEC Notes will
mature on March 15, 2004 and are redeemable on or after March 15, 2002, at our
option, in whole or in part, at specified prices.

         The WEC II Notes bear interest at a rate of 12 1/2% per annum, payable
on March 15 and September 15, commencing September 15, 1997. The WEC II Notes
mature on March 15, 2004 and are redeemable on or after March 15, 2002, at our
option, in whole or in part, at specified prices.

         We have unconditionally guaranteed the obligations of WEC and WEC II
under the WEC Notes and the WEC II Notes and such obligations are secured by
security interests in the equipment and other property purchased by WEC and WEC
II, as the case may be, with the proceeds thereof.

         The 1997 Senior Subordinated Notes are unsecured senior subordinated
obligations, rank in parity in right of payment with the 1998 Notes (as defined
below), and are junior in right of payment to all of our existing and future
senior indebtedness. The 1997 Senior Subordinated Notes bear interest at a rate
of 15% per annum, payable on March 1 and September 1, commencing September 1,
2002.

         Until March 1, 2002, interest on the 1997 Senior Subordinated Notes
will accrue and be compounded semiannually, but will not be payable in cash.
Interest on the Accumulated Amount (as defined in the indenture governing the
1997 Senior Subordinated Notes) of the 1997 Senior Subordinated Notes as of
March 1, 2002 will be payable semiannually commencing September 1, 2002. The
1997 Senior Subordinated Notes will mature on March 1, 2007 and are redeemable
on or after March 1, 2002, at our option, in whole or in part, at specified
prices.

         1998 Debt Placement

         In March 1998, we issued $200.0 million in aggregate principal amount
of our 10% Senior Subordinated Notes Due 2008 (the "1998 Cash-Pay Notes") and
$250.0 million in aggregate principal amount of our 11% Senior Subordinated
Deferred Interest Notes Due 2008 (the "1998 Deferred Interest Notes" and,
together with the 1998 Cash-Pay Notes, the "1998 Notes"). The 1998 Notes are
unsecured, senior subordinated obligations, rank in parity in right of payment
with the 1997 Senior Subordinated Notes, and are junior in right of payment to
all of our existing and future senior indebtedness.


         The 1998 Cash-Pay Notes bear interest at a rate of 10% per annum,
payable on March 15 and September 15, commencing September 15, 1998. The 1998
Cash-Pay Notes will mature on March 15, 2008 and are redeemable on or after
March 15, 2003, at our option, in whole or in part, at specified prices, plus
accrued interest, if any, to the date of redemption.



         The 1998 Deferred Interest Notes bear interest at a rate of 11% per
annum, payable on March 15 and September 15, commencing September 15, 2003.
Until March 15, 2003, interest on the 1998 Deferred Interest Notes will accrue
and be compounded semiannually, but will not be payable in cash. Interest on the
Accumulated Amount (as defined in the indenture governing the


                                       55
<PAGE>

1998 Deferred Interest Notes) of the 1998 Deferred Interest Notes as of March
15, 2003 will be payable semiannually commencing September 15, 2003. The 1998
Deferred Interest Notes will mature on March 15, 2008 and are redeemable on or
after March 15, 2003, at our option, in whole or in part, at specified prices,
plus accrued and unpaid interest, if any, to the date of redemption.

         Indentures

         The indentures relating to the 1995 Senior Notes, the 1997 Notes and
the 1998 Notes contain certain covenants which, among other things, restrict our
ability and that of certain of our subsidiaries to: incur additional
indebtedness; create liens; engage in sale-leaseback transactions; pay dividends
or make distributions in respect of capital stock; make investments or certain
other restricted payments; sell assets; issue or sell stock of such
subsidiaries; enter into transactions with stockholders or affiliates; acquire
assets or businesses not constituting "telecommunications assets" (as defined in
the indenture relating to the 1995 Senior Notes); or consolidate, merge or sell
assets. The covenants contained in these indentures are subject to exceptions
and our new media subsidiaries are not subject to many of the covenants
contained therein, although our ability to make additional investments in such
subsidiaries is limited.

         Lucent Credit Agreement

         In October 1998, we and WinStar Network Expansion, LLC, a limited
liability company wholly owned by us and formed to facilitate the financing of
equipment purchases, entered into a supply agreement with Lucent. Also in
October 1998, WinStar, WinStar Network Expansion, Lucent, as administrative
agent and lender, and State Street Bank and Trust Company, as collateral agent,
entered into a credit agreement which sets forth the terms and conditions under
which Lucent (or its assignee lenders) will provide us with purchase money
financing (the "Credit Commitments") in an aggregate amount of up to $2.0
billion in connection with the buildout of our domestic and international
broadband network. The Credit Commitments may be drawn by WinStar Network
Expansion as and when needed during the buildout of the network. The credit
agreement allows for aggregate borrowings of up to $2.0 billion; provided,
however, that Lucent is not required to have outstanding at any one time
aggregate loans and commitments in excess of $500.0 million.

         During the six months ended June 30, 1999, we incurred approximately
$285.2 million in indebtedness under our financing agreement with Lucent. As of
June 30, 1999, the total amount outstanding under the Lucent financing agreement
was approximately $362.7 million. Under the terms of this five year agreement,
Lucent will provide up to $2.0 billion to finance the purchase of equipment and
related services, not to exceed $500.0 million at any one time held by Lucent.
In July 1999, a commercial bank purchased from Lucent, for syndication, $350.0
million of WinStar's borrowings under the financing agreement, thereby creating
additional availability in such amount.

         Additional amounts of the Credit Commitments become available on a
dollar-for-dollar basis as the loans or unfunded commitments are syndicated by
Lucent to other lenders. WinStar Network Expansion may draw against the
available Credit Commitments until they have been fully drawn or the fifth
anniversary of the credit agreement, whichever is earlier. The credit agreement
provides that borrowings will fall into one of five annual tranches. The tranche
under

                                       56
<PAGE>

which a loan is drawn will determine when such loan is to be repaid. Borrowings
made during the first year, second year, third year, fourth year and fifth year
would be considered Tranche 1, Tranche 2, Tranche 3, Tranche 4 and Tranche 5
borrowings, respectively.

         Interest on each loan made under the Credit Commitments will accrue at
a floating rate equal to, at WinStar Network Expansions' election, either a base
rate (determined in relation to the then current prime rate) or at the London
Inter-Bank Offered Rate, in each case plus a margin which may vary over the life
of the facility. Interest will be payable quarterly in arrears for base rate
advances and at the end of each interest period (which can be one, three or six
months in length, at WinStar Network Expansions' election) for LIBOR advances;
provided, however, that interest on loans accruing during the first year of the
tranche of which such loan is a part may, at WinStar Network Expansions'
election, be deferred and the deferred interest shall accrue interest at the
same rates as the principal of the loans.

         The principal of any tranche as well as any deferred interest thereon
will be repaid in sixteen equal installments, payable on the last day of each
calendar quarter, commencing on the last day of the first quarter following the
fourth anniversary of the date the applicable tranche first becomes available.

         Loans made under the credit agreement are also subject to mandatory
prepayment upon the occurrence of certain events, including (1) receipt by us or
our Restricted Subsidiaries (as defined in the credit agreement) of proceeds of
certain asset sales or casualty events which are not reinvested in our business
and (2) the generation of Excess Cash Flow (as defined in the credit agreement),
if any, by us. WinStar Network Expansion will also be entitled to prepay the
loans at its option at any time.

         Loans made under the credit agreement will be secured by a purchase
money security interest in the equipment comprising the network, to the extent
the purchase of such equipment is financed under the credit agreement.
Additionally, WinStar Network Expansions' obligations under the credit agreement
are guaranteed by us and certain of our subsidiaries.


         The credit agreement contains significant covenants of WinStar
Network Expansion, WinStar and certain of our subsidiaries, including, but not
limited to:



         o        affirmative covenants with respect to compliance with laws,
                  inspection rights, performance of other obligations, delivery
                  of financial statements and other information, interest rate
                  cap arrangements and maintenance of licenses and certain other
                  assets;



         o        negative covenants restricting the ability to incur or create
                  (with certain exceptions) liens, debt and capitalized lease
                  obligations, and otherwise restricting (with customary
                  exceptions) mergers or consolidations, disposal of assets,
                  investments, payments of dividends and distributions,
                  modification of tax-sharing or management or servicing fee
                  agreements, changes in the nature of the business conducted,
                  prepayment or redemption of debt, creation of partnerships and
                  new subsidiaries and transactions with affiliates; and


                                       57
<PAGE>

         o        financial covenants.


WinStar currently is in compliance with these covenants, including such
financial covenants as are presently applicable.


         Equipment Lease Financings and Credit Lines


         Our subsidiaries have entered into, and will continue to seek,
financing arrangements, including sale/leaseback transactions, with respect to
equipment, including telecommunications switches, radios and other related
equipment. As of June 30, 1999, we owed an aggregate of $322.1 million under
such financing arrangements, all of which are on terms we consider customary in
the telecommunications industry. In addition, WinStar New Media and certain of
its subsidiaries are parties to a $6.6 million term loan facility which they
used to finance a portion of their capital needs. Principal on the term loan is
payable on a quarterly basis through December 31, 2000. Interest accrues and is
payable quarterly based on the lower of the LIBOR or prime rate plus a margin.


         Accounts Receivable Financing

         In June 1999, we completed a $35.0 million accounts receivable
securitization financing arrangement. Under this financing, we may borrow up to
the lesser of the maximum amount of the facility (which has been initially set
at $25.0 million, increasing to $35.0 million when certain conditions are met)
and the amount determined under a borrowing base formula. Borrowings under this
facility will bear interest at the London Inter-Bank Offered Rate, plus 1.5%. As
of June 30, 1999, the Company had no outstanding balance under this financing.

Common Stock

         Our authorized capital stock includes 200,000,000 shares of common
stock, $.01 par value. The holders of common stock are entitled to one vote for
each share held of record on all matters submitted to a vote of stockholders.
Although we are restricted from paying cash dividends under the terms of the
agreements governing our indebtedness (and, even if we were not so restricted,
we do not currently intend to pay any dividends), holders of common stock are
entitled to receive ratably such dividends as may be declared by our Board of
Directors out of funds legally available therefor. In the event of a liquidation
or dissolution, holders of common stock are entitled to share ratably in all
assets remaining after payment of liabilities and liquidation preference of
preferred stock.

         Holders of common stock have no preemptive rights and have no rights to
convert their common stock into any other securities. There are no redemption or
sinking fund provisions applicable to the common stock. All of the outstanding
shares of common stock are fully paid and nonassessable.

                                       58
<PAGE>

         Our certificate of incorporation:

         o        provides for a board of directors divided into three classes,
                  each of which generally serves for a term of three years, with
                  only one class of directors being elected in each year;

         o        provides that directors may be removed with or without cause
                  and only by an affirmative vote of holders of at least a
                  majority of our capital stock entitled to vote thereon; and

         o        requires an affirmative vote of holders of at least two-thirds
                  of our capital stock entitled to vote to alter, amend or
                  repeal the provisions relating to the classification of, and
                  the removal of members from, the Board of Directors.

         Nominations for our Board of Directors may be made by our Board or by
any stockholder entitled to vote for the election of directors. A stockholder
entitled to vote for the election of directors may nominate a person or persons
for election as director only if written notice of such stockholder's intent to
make such nomination is given to our Secretary not later than sixty days in
advance of the meeting. Our certificate of incorporation and by-laws do not
provide for cumulative voting rights. This means that holders of a majority of
our capital stock who vote in the election of directors can elect all of the
directors and, in such event, the holders of the remaining shares will not be
able to elect any of our directors. A special meeting of our stockholders may be
called at the request of the holders of at least 10% of our outstanding capital
stock entitled to vote generally in all matters.

Preferred Stock

         Our certificate of incorporation and Delaware General Corporation Law
give our Board of Directors the authority, without further stockholder action,
to issue a maximum of 15,000,000 shares of preferred stock. Our Board of
Directors has the authority to fix the following terms with respect to shares of
any series of preferred stock:

         o        the designation of the series;

         o        the number of shares to comprise the series;

         o        the dividend rate or rates payable with respect to the shares
                  of the series;

         o        the redemption price or prices, if any, and the terms and
                  conditions of any redemption;

         o        the voting rights;

         o        any sinking fund provisions for the redemption or purchase of
                  the shares of the series;

                                       59
<PAGE>

         o        the terms and conditions upon which the shares are convertible
                  or exchangeable, if they are convertible or exchangeable; and

         o        any other relative rights, preferences and limitations
                  pertaining to the series.

         Series A Preferred Stock

         In February 1997, we and one of our wholly owned subsidiaries sold in a
private placement an aggregate of 4,000,000 shares of Series A 6% preferred
stock and warrants to purchase 1,600,000 shares of our common stock for an
aggregate purchase price of $100.0 million.

         Each share of Series A preferred stock has a stated value of $25 and
entitles the holder thereof to receive dividends from us at a rate per annum
equal to 6% of this value. Dividends accrue and are cumulative from the date of
issuance and are payable in arrears quarterly as of March 31, June 30, September
30 and December 31 of each year. We may, at our election, pay such dividends in
cash or through the issuance of additional shares of Series A preferred stock.

         The shares of Series A preferred stock are convertible into that number
of shares of our common stock derived by dividing the aggregate Stated Value of
the Series A preferred stock being converted by $25 (subject to adjustment). On
February 11, 2002, any Series A preferred stock still outstanding will be
automatically converted into shares of our common stock, unless we elect to pay
cash therefor in an amount equal to the stated value plus all accrued and unpaid
dividends thereon (the "Liquidation Preference").

         The warrants entitle the holders thereof to purchase an aggregate of
1,600,000 shares of our common stock for $25 per share (subject to adjustment)
at any time until February 11, 2002. We may accelerate the expiration date at
any time after February 11, 2000 if our common stock trades at $40 or more for a
period of 20 consecutive days.

         As of June 30, 1999, after giving effect to conversions of Series A
preferred stock into our common stock and the issuance of shares of Series A
preferred stock as dividends, there were approximately 4,275,000 shares of
Series A preferred stock outstanding.

         Rights to Purchase Series B Preferred Stock

         The following is a summary of the rights agreement dated as of July 2,
1997 (the "Rights Plan"), between us and Continental Stock Transfer & Trust
Company, as rights agent, which was adopted by our Board of Directors on July 2,
1997. This summary of the Rights Plan does not purport to be complete and is not
a substitute for the complete discussion contained in the Rights Plan.

         Under the Rights Plan, holders of our common stock received, as a
dividend, preferred stock purchase rights (the "Rights") at the rate of one
Right for each share of our common stock held as of the close of business on
July 14, 1997. One Right will also attach to each share of our common stock
issued thereafter. Currently, the Rights are not separate from our common stock
and are not exercisable, and the Rights will only separate from our common stock
and become

                                       60
<PAGE>

exercisable if a person or group acquires 10% or more of our outstanding common
stock (an "Acquiring Person") or launches a tender or exchange offer that would
result in ownership of 10% or more of our outstanding common stock. Each Right
that is not owned by an Acquiring Person entitles the holder of the Right to buy
one one-thousandth of one share (a "Unit") of Series B Preferred Stock which we
will issue. If any person becomes an Acquiring Person, or if an Acquiring Person
engages in certain transactions involving conflicts of interest or in a business
combination in which our common stock remains outstanding, then the Rights Plan
provides that each Right, other than any Right held by the Acquiring Person,
entitles the holder to purchase, for $225, Units with a market value of $450.
However, if we are involved in a business combination in which we are not the
survivor, or if we sell 50% or more of our assets or earning power to another
person, then the Rights Plan provides that each Right entitles the holder to
purchase, for $225, shares of the common stock of the Acquiring Person's
ultimate parent having a market value of $450.

         At any time until ten days following the date on which a person
acquires 10% or more of our common stock, we may redeem all (but not less than
all) of the Rights for $0.0001 per Right. The Rights expire in July 2002. The
Series B preferred stock will have dividend and liquidation preferences over our
common stock, but junior to any other series of our preferred stock.

         Series C Preferred Stock

         On December 17, 1997, we and one of our wholly owned subsidiaries sold
in a private placement an aggregate of 175,000 shares of our Series C 14 1/4%
Senior Cumulative Preferred Stock Due 2007 for an aggregate purchase price of
$175.0 million.

         Dividends on the Series C preferred stock accrue from December 22, 1997
at the rate per share of 14 1/4% of the Accumulated Amount (as defined in the
certificate of designations governing the Series C preferred stock) per annum,
compounded semiannually on each June 15 and December 15, but will not be payable
in cash, except as set forth in the next sentence. Commencing on the first June
15 or December 15 (each a "Dividend Payment Date") which is at least six months
after the later of December 15, 2002, and the Specified Debt Satisfaction Date
(as defined in the certificate of designations governing the Series C preferred
stock) (the "Cash Payment Date"), dividends on the Series C preferred stock will
be payable in cash at a rate per annum equal to 14 1/4% of the Accumulated
Amount as of the Dividend Payment Date preceding such date. In the event that
the Specified Debt Satisfaction Date has not occurred before December 15, 2002,
the rate otherwise applicable to the Series C preferred stock will be increased
by 150 basis points from December 15, 2002, until the Dividend Payment Date
falling on or after the Specified Debt Satisfaction Date.

         The Series C preferred stock ranks: (1) senior to all existing and
future Junior Stock (as defined in the certificate of designations governing the
Series C preferred stock), including the Series A preferred stock; (2) in parity
with all existing and future Parity Stock (as defined in the certificate of
designations governing the Series C preferred stock), including the Series D
preferred stock and Series F preferred stock; and (3) junior to all future
Senior Stock (as defined). In addition, as equity, the Series C preferred stock
ranks junior in right of payment to all of our indebtedness and that of our
subsidiaries.

                                       61
<PAGE>

         The Series C preferred stock will not be redeemable prior to December
15, 2002. On or after December 15, 2002, the Series C preferred stock will be
redeemable at our option, in whole or in part, at specified redemption prices
plus accumulated and unpaid dividends, if any, to the date of redemption. On
December 15, 2007, we will be required to redeem the Series C preferred stock at
a price equal to the Accumulated Amount thereof plus accumulated and unpaid
dividends, if any, out of funds legally available therefor.

         On any scheduled Dividend Payment Date following the Specified Debt
Satisfaction Date, we may, at our option, exchange all but not less than all of
the shares of Series C Preferred Stock then outstanding for 14 1/4% Senior
Subordinated Deferred Interest Notes Due 2007 ("Exchange Debentures") in an
aggregate Accumulated Amount equal to the aggregate Accumulated Amount of the
shares of Series C preferred stock outstanding at the time of such exchange,
plus accumulated and unpaid dividends to the date of exchange. Until the Cash
Payment Date, interest on the Exchange Debentures will accrue at a rate of 14
1/4% of the Accumulated Amount per annum and will be compounded semiannually on
each June 15 and December 15 (each an "Interest Payment Date") but will not be
payable in cash except as set forth in the next sentence. Commencing on the
first Interest Payment Date following the later of the Exchange Date (as defined
in the indenture governing the Exchange Debentures) or the Cash Payment Date,
interest will be payable in cash at a rate per annum equal to 14 1/4% of the
Accumulated Amount as of the Exchange Date. The Exchange Debentures, if issued,
will be unsecured, senior subordinated obligations, subordinated in right of
payment to all of our senior indebtedness and to all indebtedness and other
liabilities (including trade payables) of our subsidiaries, and will rank pari
passu with the 1997 Senior Subordinated Notes. The Exchange Debentures, if
issued, will not be redeemable prior to December 15, 2002. On or after December
15, 2002, the Exchange Debentures are redeemable at our option, in whole or in
part, at certain redemption prices plus accrued and unpaid interest, if any, to
the date of redemption.

         Series D Preferred Stock

         On March 17, 1998, we and one of our subsidiaries sold an aggregate of
$200.0 million of our Series D 7% Senior Cumulative Convertible Preferred Stock
Due 2010 in a private placement.

         Dividends at the rate of 7% per annum on the Series D preferred stock
are cumulative from the date of issuance and are payable quarterly in arrears on
each March 15, June 15, September 15 and December 15, commencing September 15,
1998, out of funds legally available therefor. Dividends shall be, at our
option, payable (1) in cash or (2) through the issuance of shares of our common
stock. The Series D preferred stock is convertible at any time after the issue
date, at the option of the holders thereof, into shares of our common stock at a
rate (subject to adjustment in certain events) of 1.0079 shares of our common
stock for each share of Series D preferred stock, equivalent to a conversion
price of $49.61 for each share of our common stock.

         The Series D preferred stock ranks (1) senior to all existing and
future Junior Stock (as defined in the certificate of designations governing the
Series D preferred stock), including the Series A preferred stock; (2) pari
passu with all existing and future Parity Stock (as defined in the certificate
of designations governing the Series D preferred stock), including the Series C
preferred stock and Series F preferred stock; and (3) junior to all future
Senior Stock (as defined).

                                       62
<PAGE>

In addition, as equity, the Series D preferred stock will rank junior in right
of payment to all of our indebtedness and that of our subsidiaries.

         The Series D preferred stock is not redeemable prior to March 20, 2001.
On or after such date, the Series D preferred stock will be redeemable at our
option, in whole or in part, at any time or from time to time, at specified
redemption prices plus accrued and unpaid dividends, if any. The Series D
preferred stock is subject to mandatory redemption on March 15, 2010, at a
redemption price of $50.00 per share plus accrued and unpaid dividends, if any.
Upon the occurrence of a Change in Control (as defined in the Certificate of
Designations governing the Series D preferred stock), we will be obligated to
adjust the conversion price as provided in the Certificate of Designations
relating to the Series D preferred stock.

         Series E Preferred Stock

         In connection with an acquisition we consummated in August 1998, we
issued an aggregate of 75,100 shares of our Series E preferred stock. The Series
E preferred stock is non-voting, non-redeemable and does not earn dividends.
Each share of Series E preferred stock has a liquidation preference of $59.93
per share, but is junior in right to receive distributions in liquidation to all
other currently existing preferred stock and any other class of preferred stock
authorized in the future unless such new class is expressly made junior or equal
to the Series E preferred stock. The holders of the Series E preferred stock may
convert all, but not less than all, of their stock into shares of our common
stock on a one-for-one basis any time on or after August 28, 1999. Under certain
conditions, WinStar may require these holders to convert.

Registrar and Transfer Agent

         The registrar and transfer agent for the Series A preferred stock,
Series C preferred stock, Series D preferred stock, Series F preferred stock and
Common Stock is Continental Stock Transfer & Trust Company, 2 Broadway, New
York, New York 10004.

                        SELLING AND PLAN OF DISTRIBUTION

         This Prospectus relates to the resale by the selling securityholders of
the securities listed below. All of the securities being registered under the
registration statement of which this prospectus forms a part are being so
registered pursuant to registration rights granted by us to the selling
securityholders. None of the selling securityholders has had a material
relationship with us or any of our predecessors or affiliates within the past
three years, except as described in the footnotes below or otherwise in this
prospectus.

                                       63
<PAGE>

Series F Preferred Stock(1)

<TABLE>
<CAPTION>

                                    Beneficial Ownership              Number of Shares of
Name of Selling                  of Series F preferred stock     Series F preferred stock
Securityholder                     as of July 21, 1999                   to be Sold
- --------------                     -------------------                   ----------
<S>                              <C>                             <C>
The Bank of New York                     2,250(1)                        2,250(1)
Bear, Stearns Securities
Corp.                                   41,950(1)                       41,950(1)
Boston Safe Deposit & Trust
Company                                  4,649(1)                        4,649(1)
Brown Brothers Harriman &
Co.                                     15,400(1)                       15,400(1)
Chase Manhattan Bank                       200(1)                          200(1)
Chase Manhattan Bank                     1,500(1)                        1,500(1)
CIBC World Markets Corp.                 6,750(1)                        6,750(1)
Credit Suisse First Boston
Corporation                             10,550(1)                       10,550(1)
Custodial Trust Company                  3,000(1)                        3,000(1)
Deutsche Bank Securities
Inc.                                     7,500(1)                        7,500(1)
First Options of Chicago, Inc.             750(1)                          750(1)
Goldman, Sachs & Co.                    11,250(1)                       11,250(1)
Goldman Sachs International              4,000(1)                        4,000(1)
Investors Fiduciary Trust
Company/SSB                                600(1)                          600(1)
J.P. Morgan Securities Inc.              7,500(1)                        7,500(1)
Kellner, Dileo & Co.                     1,000(1)                        1,000(1)
Lehman Brothers, Inc.                   31,480(1)                       31,480(1)
Morgan Stanley & Co.
Incorporated                            30,300(1)                       30,300(1)
The Northern Trust Company                  25(1)                           25(1)
PNC Bank, National
Association                              3,085(1)                        3,085(1)
Prudential Securities
Incorporated                            28,000(1)                       28,000(1)
Salomon Smith Barney Inc.               29,100(1)                       29,100(1)
</TABLE>

- --------
(1)      Includes shares of common stock which may be issued to such holders as
         dividends or upon conversion of the Series F stock.

                                       64
<PAGE>


<TABLE>
<CAPTION>

                                    Beneficial Ownership              Number of Shares of
Name of Selling                  of Series F preferred stock     Series F preferred stock
Securityholder                     as of July 21, 1999                   to be Sold
- --------------                     -------------------                   ----------
<S>                              <C>                             <C>
State Street Bank & Trust
Company                                  46,111(1)                        46,111(1)
Suntrust Bank, Atlanta                    2,000(1)                         2,000(1)
Union Bank of California,
N.A.                                         50(1)                            50(1)
Warburg Dillon Read LLC                   9,500(1)                         9,500(1)
Weiss, Peck & Greer, L.L.C.               1,500(1)                         1,500(1)

Other Common Stock

<CAPTION>

                                   Beneficial Ownership              Number of Shares of
Name of Selling                      of Common Stock                    Common Stock
Securityholder                     as of July 21, 1999                   to be Sold
- --------------                     -------------------                   ----------
<S>                              <C>                             <C>
Glenn Anderson                            181(2)                              181(2)
Mark Chestnut                             226(2)                              226(2)
Dale Dennis                                46(2)                               46(2)
Barry Fingerhut                            (3)                                 (3)
Gregory  Green                            973(2)                              973(2)
Irwin Leiber                               (3)                                 (3)
William Lonergan                        2,669(4)                            2,669(4)
Jared Miller                              973(2)                              973(2)
Edward A. Morin, Jr.                   94,129(2)                           94,129(2)
Trevor Parkinson                          181(2)                              181(2)
Ed Piersma                                 90(2)                               90(2)
Angela Quinn                              253(2)                              253(2)
Raptor Global Fund, L.P.                   (3)                                 (3)
Raptor Global Fund Ltd.                    (3)                                 (3)
Reservoir New Media LLC                    (3)                                 (3)
Barry Rubenstein                           (3)                                 (3)
Seneca Ventures                            (3)                                 (3)
Ralph Sims                             94,129(2)                           94,129(2)
Chad Skidmore                             973(2)                              973(2)
Walter Sonnenfeldt                        535(4)                              535(4)
Michael Stan                           43,444(2)                           43,444(2)
Tudor Private Equity Fund,                 (3)                                 (3)
L.P.
</TABLE>


                                       65
<PAGE>


<TABLE>
<CAPTION>

                                   Beneficial Ownership             Number of Shares of
Name of Selling                      of Common Stock                    Common Stock
Securityholder                     as of July 21, 1999                   to be Sold
- --------------                     -------------------                   ----------
<S>                              <C>                             <C>
Wheatley Foreign Partners,                 (3)                                (3)
L.P.

Wheatley Partners, L.P.                    (3)                                (3)
Leonard Whitwer                           57,925(2)                         57,925(2)
Woodland Venture Fund                      (3)                                (3)


- ------------

(1)      The shares of Series F preferred stock set forth above were sold in the
         June 1999 Private Placement. The selling preferred stockholders shall
         also be entitled to sell, and the Registration Statement of which this
         Prospectus forms a part also covers, any and all dividend shares that
         may be issued in lieu of cash dividends on such Series F preferred
         stock during the term of the Series F preferred stock and any and all
         conversion shares issued upon conversion of the Series F preferred
         stock.

(2)     The shares were issued in connection with the acquisition of Northwest
        Nexus, Inc.

(3)      The shares to be resaleable under this prospectus for this selling
         stockholder will be those shares issuable to him under certain
         circumstances in connection with his ownership of equity of WinStar New
         Media Company, Inc., a subsidiary of our company. The number of shares
         so issuable shall be determined prior to effectiveness of the
         registration statement of which this prospectus forms a part and shall
         be provided by amendment thereto prior to such effectiveness.

(4)     The shares of common stock set forth above were issued in connection
        with certain transactions pursuant to which we acquired 38 GHz
        licenses.



         The Series F preferred stock, dividend shares and other shares of
common stock may be offered and sold from time to time by the selling
securityholders or by their pledgees, donees, transferees or other successors in
interest, and the conversion shares, if and when issued, may be offered and sold
from time to time by the holders thereof or by their pledgees, donees,
transferees or other successors in interest, as market conditions permit in the
over-the-counter market, including the Nasdaq National Market, in negotiated
transactions or otherwise, at prices and terms then prevailing or at prices
related to the then-current market price, or in negotiated transactions. The
securities may be sold by one or more of the following methods, without
limitation:

         o        a block trade in which a broker or dealer so engaged will
                  attempt to sell the shares as agent but may position and
                  resell a portion of the block as principal to facilitate the
                  transaction;

         o        purchases by a broker or dealer as principal and resale by
                  such broker or dealer for its account pursuant to this
                  prospectus;

                                       66
<PAGE>

         o        ordinary brokerage transactions and transactions in which the
                  broker solicits purchases;

         o        transactions between sellers and purchasers without a
                  broker/dealer; and

         o        underwritten offerings.

         In effecting sales, brokers or dealers may arrange for other brokers or
dealers to participate. Such brokers or dealers may receive commissions or
discounts from selling securityholders in amounts to be negotiated. Such brokers
and dealers and any other participating brokers and dealers may be deemed to be
"underwriters" within the meaning of the Securities Act, in connection with such
sales.

                                  LEGAL MATTERS

         The legality of the issuance of the dividend shares and conversion
shares will be passed upon for the Company by Graubard Mollen & Miller, New
York, New York. Certain partners and employees of Graubard Mollen & Miller own
shares of common stock.

                                     EXPERTS

         The consolidated financial statements of WinStar as of December 31,
1997 and 1998 and for the years ended December 31, 1996, 1997 and 1998
incorporated by reference into this Prospectus, have been audited by Grant
Thornton LLP, independent certified public accountants, to the extent and for
the periods indicated in their reports thereon.

                                       67
<PAGE>

                          UNAUDITED PRO FORMA CONDENSED
                        CONSOLIDATED FINANCIAL STATEMENTS

         The following unaudited pro forma as adjusted condensed consolidated
statement of operations for the six months ended June 30, 1999 gives effect to
the June 1999 Private Placement as if it had occurred on January 1, 1999.

         The following unaudited pro forma condensed consolidated statement of
operations for the year ended December 31, 1998 gives effect to the March 1998
Financing Transactions, as if they occurred on January 1, 1998. The following
unaudited pro forma as adjusted condensed consolidated statement of operations
for the year ended December 31, 1998 gives effect to the March 1998 Financing
Transactions and the June 1999 Private Placement as if they had occurred on
January 1, 1998.

         The pro forma financing statements do not purport to represent what our
results of operations or financial condition would actually have been had the
March 1998 Financing Transactions and June 1999 Private Placement in fact
occurred on the dates referenced above or to project our results of operations
for any future period.


         These pro forma financial statements should be read in conjunction with
the notes to the unaudited pro forma condensed consolidated financial statements
included herein and our consolidated financial statements and condensed
consolidated financial statements which are incorporated by reference into this
prospectus.


                                       F-1
<PAGE>

                  WINSTAR COMMUNICATIONS INC. AND SUBSIDIARIES
       UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                     FOR THE SIX MONTHS ENDED JUNE 30, 1999
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)



</TABLE>
<TABLE>
<CAPTION>
                                                               Adjustments
                                                               for the June
                                                               1999 Private
                                              Historical        Placement               As Adjusted
                                           ----------------   ---------------        ----------------
<S>                                        <C>                <C>                    <C>
Operating revenues:
   Telecommunications services
       Core                                $    145,443      $                       $      145,443
       Other                                     14,305                                      14,305
                                           ------------      --------------          --------------
   Total telecommunications services            159,748                                     159,748
   Information services                          24,850                                      24,850
                                           ------------      --------------          --------------
Total operating revenues                        184,598                                     184,598
                                           ------------      --------------          --------------

Operating expenses

   Cost of services and products                141,295                                     141,295
   Selling, general and administrative
       expenses                                 206,163                                     206,163
   Depreciation and amortization                 63,276                                      63,276
                                           ------------      --------------          --------------
Total operating expenses                        410,734                                     410,734
                                           ------------      --------------          --------------
       Operating loss                          (226,136)                                   (226,136)
Other expense
   Interest expense                            (101,334)                                   (101,334)
   Interest income                                9,980                                       9,980
                                           ------------      --------------          --------------
Loss from continuing operations
   before income tax benefit                   (317,490)                                   (317,490)
Income tax benefit                                2,000                                       2,000
                                           ------------      --------------          --------------
Net loss                                       (315,490)                                   (315,490)

Less preferred stock dividends                  (24,992)           (10,375)     (a)         (35,367)
                                           ------------      --------------          --------------
Net loss applicable to common stock        $   (340,482)     $     (10,375)          $     (350,857)
Net loss applicable to common stock
  per share                                $      (7.23)                             $        (7.42)
                                           ============      ==============          ==============

Weighted average shares outstanding              47,068                230      (a)          47,298
                                           ============      ==============     ===  ==============
</TABLE>


                                       F-2
<PAGE>

                  WINSTAR COMMUNICATIONS, INC. AND SUBSIDIARIES
       UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                      FOR THE YEAR ENDED DECEMBER 31, 1998
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>
                                                                      Pro Forma
                                                                     Adjustments
                                                                    for the March                      Adjustments
                                                                         1998                          for the June
                                                                      Financing                        1999 Private
                                                     Historical      Transactions        Pro Forma      Placement        As Adjusted
                                                   --------------   --------------  -----------------  -------------     -----------
<S>                                                <C>               <C>            <C>                <C>               <C>
Operating revenues:
   Telecommunications services
       Core                                        $      141,466    $                 $      141,466  $                 $  141,466
       Other                                               49,643                              49,643                        49,643
                                                   --------------    -------------     --------------  -------------     ----------
   Total telecommunications services                      191,109                             191,109                       191,109
   Information services                                    53,338                              53,338                        53,338
                                                   --------------    -------------     --------------  -------------     ----------
Total operating revenues                                  244,447                             244,447                       244,447
                                                   --------------    -------------     --------------  -------------     ----------
Operating expenses

   Cost of services and products                          204,748                             204,748                       204,748
   Selling, general and administrative expenses           263,155                             263,155                       263,155
   Depreciation and amortization                           74,953                              74,953                        74,953
                                                   --------------    -------------     --------------  -------------     ----------
Total operating expenses                                  542,856                             542,856                       542,856
                                                   --------------    -------------     --------------  -------------     ----------
   Operating loss                                       (298,409)                           (298,409)                     (298,409)
Other expenses
   Interest expense                                     (156,599)         (10,757) (a)      (167,356)                     (167,356)
   Interest income                                         29,758                              29,758                        29,758
                                                   --------------    -------------     --------------  -------------     ----------
Loss from continuing operations before income
   tax benefit                                          (425,250)         (10,757)          (436,007)                     (436,007)
Income tax benefit                                          5,500                               5,500                         5,500
                                                   --------------    -------------     --------------  -------------     ----------
Net loss from continuing operations                     (419,750)         (10,757)          (430,507)                     (430,507)
Loss from discontinued operations                        (24,974)                            (24,974)                      (24,974)
                                                   --------------    -------------     --------------  -------------     ----------
Net loss                                                (444,724)         (10,757)          (455,481)                     (455,481)
Less preferred stock dividends                           (42,968)          (2,994) (a)       (45,962)       (21,750) (b)   (67,712)
                                                   --------------    -------------     --------------  -------------     ----------
Net loss applicable to common stock                $    (487,692)    $    (13,751)     $    (501,443)  $    (21,750)     $(523,193)
                                                   ==============    =============     ==============  =============     ==========
Net loss applicable to common stock per share
   from continuing operations                      $      (11.96)                      $      (12.30)                    $  (12.70)
Net loss per share from discontinued operations            (0.65)                              (0.64)                        (0.64)
                                                   --------------                      --------------                    ----------
Net loss applicable to common stock per share      $      (12.61)                      $      (12.94)                    $  (13.34)
                                                   ==============                      ==============                    ==========

Weighted average shares outstanding                        38,681               72             38,753            460         39,213
                                                   ==============    =============     ==============  =============     ==========
</TABLE>


                                       F-3
<PAGE>

               Notes to Unaudited Pro Forma Condensed Consolidated
                              Financial Statements
                        (in thousands, except share data)

         The adjustments below were prepared based on data currently available
and in some cases are based on estimates or approximations. It is possible that
the actual amounts to be recorded may have an impact on the results of
operations different from that reflected in the accompanying unaudited pro
forma condensed consolidated financial statements. It is therefore possible that
the entries presented below will not be the amounts that were actually recorded.

Statement of Operations for the Six Months Ended June 30, 1999


         (a)      To record the dividends on the Series F convertible preferred
                  stock as if the June 1999 Private Placement had occurred on
                  January 1, 1999.


Statement of Operations for the Year Ended December 31, 1998


         (a)      To record the March 1998 Financing Transactions as if they
                  occurred as of January 1, 1998, including preferred stock
                  dividends, interest expense and amortization of deferred debt
                  offering costs and other related fees, but not including
                  interest income earned on unused cash, as follows:



                  Dividends on the Series D preferred stock issued in March
                  1998 ($2,994).


                  Interest expense, including amortization of debt offering
                  costs, on the 1998 Notes issued in March 1998 ($10,757).


         (b)      To record the dividends on the Series F convertible
                  preferred stock as if the June 1999 Private Placement had
                  occurred on January 1, 1998.


                                       F-4
<PAGE>

                                     PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14.  Other Expenses of Issuance and Distribution

         The estimated expenses in connection with the sale of the securities
being registered hereby, are as follows:

SEC registration fee............................................ $   88,688.92
Trustees fees and expenses......................................     50,000.00
Printing expenses...............................................     10,000.00
Legal fees and expenses.........................................     75,000.00
Listing fees....................................................     30,000.00
Accounting fees and expenses....................................     75,000.00
Miscellaneous...................................................     60,000.00
                                                                 -------------
     Total...................................................... $  388,688.92
                                                                 =============


ITEM 15.  Indemnification of Directors and Officers

         Our certificate of incorporation provides that all of our directors,
officers, employees and agents shall be entitled to be indemnified by us to the
fullest extent permitted by law.

         Section 145 of the Delaware General Corporation Law concerning
indemnification of officers, directors, employees and agents is set forth below.

         "Section 145. Indemnification of officers, directors, employees and
agents; insurance.

         (a) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.

                                      II-1
<PAGE>

         (b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.

         (c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.

         (d) Any indemnification under sections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsections (a) and (b) of this
section. Such determination shall be made (1) by the board of directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (2) if such a quorum is not obtainable, or, even
if obtainable, a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (3) by the stockholders.

         (e) Expenses incurred by an officer or director in defending a civil or
criminal action, suite or proceeding may be paid by the corporation in advance
of the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer, to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the corporation as authorized in this section. Such expenses incurred by other
employees and agents may be so paid upon such terms and conditions, if any, as
the board of directors deems appropriate.

         (f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both

                                      II-2
<PAGE>

as to action in his official capacity and as to action in another capacity while
holding such office.

         (g) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under this section.

         (h) For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this section with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.

         (i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith an in a manner he reasonably
believed to be in the interest of the participants and beneficiaries of an
employee benefit plan shall be deemed to have acted in a manner "not opposed to
the best interests of the corporation" as referred to in this section.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to our directors, officers, and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by us of expenses incurred or paid by a
director, officer or controlling person in a successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, we will, unless in the
opinion of our counsel the matter has been settled by controlling precedent,
submit to the court of appropriate jurisdiction the question whether such
indemnification by us is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.

                                      II-3
<PAGE>

ITEM 16.          Exhibits

Exhibit
Number            Description
- ------            -----------



5.1      Opinion of Graubard Mollen & Miller*

12.1     Ratio of Earnings to Combined Fixed Charges and Preferred Stock
         Dividends*

23.1     Consent of Grant Thornton LLP

23.2     Consent of Graubard Mollen & Miller (included in its opinion filed as
         Exhibit 5.1)*

24       Power of Attorney (set forth on signature page)*

* To be filed by Amendment

                                      II-4
<PAGE>


ITEM 17.        Undertakings.


         (a)  The undersigned registrant hereby undertakes:

                  (1) To file, during any period in which offers or sales are
being made, a post-effective amendment of this registration statement;

                           (iii)    To include any material information with
respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement.

                  (2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

                  (3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.

         (b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

         (e) The undersigned registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.

         (h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful

                                      II-5
<PAGE>

defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

                  (i) The undersigned registrant hereby undertakes that:

                           (1)      For purposes of determining any liability
under the Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in reliance upon Rule
430A and contained in a form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this registration statement as of the time it was declared effective.

                           (2)      For the purpose of determining any liability
under the Securities Act of 1933, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

                                      II-6
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on August 31, 1999.

                                     WINSTAR COMMUNICATIONS, INC.


                                     By: /s/ William J. Rouhana, Jr.
                                        ----------------------------------------
                                       William J. Rouhana, Jr.
                                       Chairman of the Board and Chief Executive
                                       Officer

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints William J. Rouhana, Jr. and/or Timothy R.
Graham his true and lawful attorneys-in-fact and agents, each acting alone, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any or all amendments to this
Registration Statement, including post-effective amendments, and to file the
same, with all exhibits thereto, and all documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, and hereby ratifies and confirms all that said attorneys-in-fact and
agents, each acting alone, or their substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.

         Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>

<S>                          <C>                                              <C>
/s/ William J. Rouhana, Jr.  Chairman of the Board and Chief Executive        August 31, 1999
- --------------------------   Officer (and principal executive officer)
William J. Rouhana, Jr.

/s/ Nathan Kantor            President, Chief Operating Officer and Director  August 31, 1999
- ---------------------------
Nathan Kantor

                             Executive Vice President, General Counsel
/s/ Timothy R. Graham        and Director                                      August 31, 1999
- ---------------------------
Timothy R. Graham

                             Executive Vice President and Chief Financial
/s/ Charles T. Dickson       Officer                                           August 31, 1999
- ---------------------------
Charles T. Dickson

/s/ Bert W. Wasserman        Director                                          August 31, 1999
- ---------------------------
Bert W. Wasserman

/s/ William J. vanden Heuvel Director                                          August 31, 1999
- ----------------------------
William J. vanden Heuvel

/s/ Steven B. Magyar         Director                                          August 31, 1999
- ---------------------------
Steven B. Magyar

/s/ James I. Cash            Director                                          August 31, 1999
- ---------------------------
James I. Cash

/s/ Joseph P. Dwyer          Senior Vice President-Finance (Principal          August 31, 1999
- ---------------------------  Accounting Officer)
Joseph P. Dwyer
</TABLE>

                                      II-7



<PAGE>

             CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

     We have issued our reports dated March 25, 1999 accompanying the
consolidated financial statements of WinStar Communications, Inc. and
subsidiaries appearing in the 1998 Annual Report of the Company to its
shareholders and accompanying the schedule included in the Annual Report on Form
10-K/A for the year ended December 31, 1998 which are incorporated by reference
in this Registration Statement and Prospectus. We consent to the incorporation
by reference in the Registration Statement and Prospectus of the aforementioned
reports and to the use of our name as it appears under the caption "Experts."


/s/ GRANT THORNTON LLP

New York, New York
August 30, 1999


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