Pricellular Corp · 424B1 · On 7/31/96

Filed On 7/31/96   ·   SEC File 333-03737   ·   Accession Number 950123-96-3937

Prospectus   ·   Rule 424(b)(1)
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 424B1       Prospectus Dated July 30, 1996                        94    612K 

Document Table of Contents

424B1
1st Page of 94
TOC
Top
Previous
Next
Bottom
Just 1st
 
Sponsored Ads...


                                            Filed pursuant to Rule 424(b)(1)
                                      Registration No. 333-03737

2,500,000 SHARES

PRICELLULAR 

PRICELLULAR CORPORATION 

CLASS A COMMON STOCK
(PAR VALUE $.01 PER SHARE)
------------------------
All of the 2,500,000 shares of Class A Common Stock offered hereby are
being sold by the Selling Stockholders. See "Principal and Selling              
Stockholders". The Company will not receive any of the proceeds from the sale of
the shares. Price Communications Corporation, an affiliate of the Company, has  
agreed to purchase 500,000 of the shares of Class A Common Stock offered hereby,
increasing its beneficial ownership in the Company following the offering to    
8.6%.                                                                           
     The Company's Class A Common Stock is traded on the American Stock Exchange
under the symbol "PC". On July 30, 1996, the last reported sale price of the    
Class A Common Stock on the American Stock Exchange was $10 3/8 per share. See  
"Price Range of Class A Common Stock and Dividend Policy".                      
  The Company's authorized capital stock includes Class A Common Stock and
Class B Common Stock. The rights of Class A Common Stock and Class B Common     
Stock are substantially identical, except that holders of the Class A Common    
Stock are entitled to one vote per share while holders of Class B Common Stock  
are entitled to 10 votes per share and shares of Class B Common Stock are       
convertible at any time into shares of Class A Common Stock on a share-for-share
basis. Both classes vote together as one class on all matters generally         
submitted to a vote of stockholders, including the election of directors. See   
"Description of Capital Stock".                                                 

     SEE "RISK FACTORS" BEGINNING ON PAGE 12 FOR CERTAIN CONSIDERATIONS RELEVANT
TO AN INVESTMENT IN THE CLASS A COMMON STOCK.                                   
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED NOR DISAPPROVED BY THE SECURITIES AND   
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE          
SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION  
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY          
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.             
------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                                                        · Enlarge/Download Table

                                    PRICE TO             UNDERWRITING        PROCEEDS TO SELLING 
                                     PUBLIC               DISCOUNT(1)          STOCKHOLDERS(2)   
-------------------------------------------------------------------------------------------------
                                                                                                 
Per Share...................         $10.00                  $.55                   $9.45        
-------------------------------------------------------------------------------------------------
Total(3)....................       $25,000,000            $1,375,000             $23,625,000     

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(1) The Company and the Selling Stockholders have agreed to indemnify the       
several Underwriters against certain liabilities, including liabilities 
under the Securities Act of 1933. See "Underwriting".                   

(2) Before deducting expenses payable by the Company estimated at $500,000.     

(3) The Selling Stockholders have granted the Underwriters an option for 30 days
to purchase up to an additional 375,000 shares, solely to cover         
over-allotments, if any. If such option is exercised in full, the total 
   Price to Public, Underwriting Discount and Proceeds to Selling Stockholders
will be $28,750,000, $1,581,250 and $27,168,750, respectively. See      
"Underwriting".                                                         
------------------------
    The Shares are offered by the several Underwriters, subject to prior sale,
when, as and if issued to and accepted by them, subject to approval of certain  
legal matters by counsel for the Underwriters and certain other conditions. The 
Underwriters reserve the right to withdraw, cancel or modify such offer and to  
reject orders in whole or in part. It is expected that delivery of the Shares   
will be made in New York, New York on or about August 5, 1996.                  

MERRILL LYNCH & CO.                                                             
PAINEWEBBER INCORPORATED                              
NATWEST SECURITIES LIMITED  
                                WASSERSTEIN PERELLA SECURITIES, INC.
------------------------

The date of this Prospectus is July 30, 1996. 

424B1
2nd Page of 94
TOC
1st
Previous
Next
Bottom
Just 2nd

ADDITIONAL INFORMATION

     PriCellular Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in        
accordance therewith files reports, proxy statements and other information with 
the Securities and Exchange Commission (the "Commission"). These reports, proxy 
and information statements and other information may be inspected without charge
and copied at the public reference facilities maintained by the Commission at   
its principal offices at Judiciary Plaza, 450 Fifth Street, N.W., Washington,   
D.C. 20549, and at the Commission's regional offices located at Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and 7 World Trade 
Center, Suite 1300, New York, New York 10048. Copies of such materials also can 
be obtained from the Public Reference Section of the Commission at prescribed   
rates at the principal offices of the Commission at Judiciary Plaza, 450 Fifth  
Street, N.W. Washington, D.C. 20549. In addition, the Commission maintains a    
site on the Internet that contains reports, proxy statements and other          
information regarding registrants that file electronically with the Commission  
at http://www.sec.gov.                                                          

    The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act of 1933, as amended (the "Securities Act"), with   
respect to the Class A Common Stock offered hereby (including all amendments and
supplements thereto, the "Registration Statement"). This Prospectus, which forms
a part of the Registration Statement, does not contain all the information set  
forth in the Registration Statement and the exhibits filed thereto, certain     
parts of which have been omitted in accordance with the rules and regulations of
the Commission. Statements contained herein concerning the provisions of such   
documents are not necessarily complete and, in each instance, reference is made 
to the copy of such document filed as an exhibit to the Registration Statement  
or otherwise filed with the Commission. Each such statement is qualified in its 
entirety by such reference. The Registration Statement and the exhibits thereto 
can be inspected and copied at the public reference facilities and regional     
offices referred to above and at the offices of the American Stock Exchange,    
Inc., 86 Trinity Place, New York, N.Y. 10006.                                   

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 

     The Company hereby incorporates in this Prospectus by reference thereto and
makes a part hereof the following documents, heretofore filed with the          
Commission pursuant to the Exchange Act: (i) the Company's Annual Report on Form
10-K for the year ended December 31, 1995; (ii) the Company's Quarterly Report  
on Form 10-Q for the quarterly period ended March 31, 1996; (iii) the Company's 
Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1996; (iv)
the Company's Proxy Statement for the 1996 Annual Meeting of Stockholders; (v)  
the description of the Class A Common Stock contained in the Company's          
Registration Statement on Form 8-A filed on December 8, 1994; (vi) the          
description of the Class A Common Stock contained in the Company's Registration 
Statement on Form 8A/A filed on June 19, 1996; (vii) the Company's Current      
Report on Form 8-K filed on May 8, 1996; (viii) the Company's Current Report on 
Form 8-K filed on May 14, 1996; (ix) the Company's Current Report on Form 8-K   
filed on June 20, 1996; and (x) pages F-27 through F-78, F-82 through F-150 and 
F-155 through F-164 contained in the Prospectus included in the Company's       
Registration Statement on Form S-4 (Reg. No. 33-91006) at effectiveness.        

    All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
termination of the offering being made hereby shall be deemed to be incorporated
in this Prospectus by reference and to be a part hereof from the respective     
dates of the filing of such documents. Any statement contained herein or in a   
document incorporated or deemed to be incorporated by reference herein shall be 
deemed to be modified or superseded for purposes of this Prospectus and the     
Registration Statements of which it is a part to the extent that a statement    
contained herein or in any subsequently filed document which also is, or is     
deemed to be, incorporated by reference herein, modifies or supersedes such     
statement. Any statement so modified or superseded shall not be deemed, except  
as so modified or superseded, to constitute a part of this Prospectus or such   
Registration Statements.                                                        

   The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, upon written or oral request 
of any such person, a copy of any and all of the documents referred to above    
which have been or may be incorporated in this Prospectus by reference, other   
than exhibits to such documents which are not specifically incorporated by      
reference into such documents. Requests for such copies should be directed to   
Stuart B. Rosenstein, Chief Financial Officer, PriCellular Corporation, 45      
Rockefeller Plaza, New York, New York 10020, telephone (212) 459-0800.          
--------------------- 

     IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CLASS A COMMON 
STOCK OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE 
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE AMERICAN STOCK EXCHANGE,  
IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY
BE DISCONTINUED AT ANY TIME.                                                    

 2

424B1
3rd Page of 94
TOC
1st
Previous
Next
Bottom
Just 3rd

PROSPECTUS SUMMARY

 The following summary is qualified in its entirety by the more detailed
information (including the financial statements and the notes thereto) included 
elsewhere in this Prospectus. Unless otherwise indicated, all references herein 
to "PriCellular" or the "Company" include its subsidiaries and predecessors.    
References herein to the "Recent Transactions" and "Pending Transactions" refer 
to the recently consummated transactions and pending transactions, respectively,
described below under "The Company -- Recent Transactions" and "-- Pending      
Transactions". EXCEPT FOR HISTORICAL FINANCIAL INFORMATION AND UNLESS OTHERWISE 
INDICATED, ALL REFERENCES HEREIN TO POPS, NET POPS AND THE COMPANY'S SYSTEMS    
GIVE EFFECT TO THE PENDING TRANSACTIONS. NONE OF THE PENDING TRANSACTIONS ARE   
EXPECTED TO BE CONSUMMATED PRIOR TO THE CLOSING OF THIS OFFERING. See "Certain  
Terms" for the definitions of certain other terms used herein.                  

THE COMPANY 

PriCellular, through its subsidiaries, owns and operates FCC licensed 
cellular telephone systems in the United States, primarily in smaller MSAs and  
strategically located RSAs. The Company operates its Systems principally in the 
Midwest and Mid-Atlantic regions in addition to markets north of New York City  
and south of Albany, NY. As of June 30, 1996 on an actual basis, the Company    
owned cellular interests representing approximately 4.0 million Net Pops and had
approximately 118,000 subscribers. The Company sells and markets its products   
and services principally under the CELLULAR ONE(R) brand name through a         
distribution network of over 50 full service retail stores, a direct sales force
and a select group of agents. In addition, the Company has formed a strategic   
alliance with AT&T Wireless Services, Inc. ("McCaw/AT&T Wireless"), a principal 
stockholder, allowing it to take advantage of McCaw/AT&T Wireless' acquisition  
experience, vendor discounts, centralized "back office" functions and joint     
marketing opportunities in markets which are adjacent to McCaw/AT&T Wireless    
markets.                                                                        

Through selective acquisitions and asset swaps, the Company has       
concentrated its efforts on creating an integrated network of cellular systems  
in contiguous service areas. After giving effect to the Pending Transactions,   
each of which is subject to certain conditions, including FCC approval, the     
Company will own cellular interests representing approximately 4.0 million Net  
Pops with approximately 112,000 subscribers, representing a penetration rate of 
2.8%. These interests consist principally of three large operating clusters of  
cellular Systems:                                                               

   Upper Midwest Cluster -- a 1.6 million Net Pop cluster of 13 non-wireline
 Systems covering more than 65,000 contiguous square miles in Minnesota,
Wisconsin and Michigan.                                               

Mid-Atlantic Cluster -- an 853,000 Net Pop cluster of five contiguous 
     non-wireline Systems consisting of five RSAs in Ohio, Pennsylvania and West
Virginia covering more than 10,000 contiguous square miles.           

    New York Cluster -- a 1.1 million Net Pop cluster of two MSAs and two RSAs
covering more than 8,000 contiguous square miles in suburban New York 
    located between New York City and the Albany, NY MSA of SBC Communications
Inc., formerly Southwestern Bell Corporation ("SBC").                 

In addition, the Company owns two contiguous Systems in Alabama, a 44.5%        
interest in a joint venture with SBC (which is managed and operated by SBC),    
representing 260,058 Net Pops, and certain other cellular interests.            

   During 1995, the Company's customer base increased from 17,344 to 78,227.
This significant growth in subscribers was due to both acquisitions and         
increased penetration of its existing markets. As of December 31, 1995, revenues
and EBITDA of the Company were $41.5 million and $9.9 million, respectively, and
for the six months ended June 30, 1996 were $48.4 million and $16.7 million,    
respectively, in each case before giving effect to the Pending Transactions and 
the consummation of the WV-3 acquisition. On a pro forma basis, after giving    
effect to the Recent Transactions and the Pending Transactions, the revenues and
EBITDA of the Company for 1995 were $71.9 million and $19.7 million,            
respectively, and for the six months ended June 30, 1996 were $49.0 million and 
$17.3 million, respectively. See "Unaudited Pro Forma Condensed Consolidated    
Financial Statements".                                                          

 3

424B1
4th Page of 94
TOC
1st
Previous
Next
Bottom
Just 4th

CELLULAR MARKETS AND SYSTEMS                                                    

    The Company has concentrated its efforts on creating an integrated network
of cellular systems in each of its three operating clusters. The table below    
summarizes certain information concerning the Company's markets after giving    
effect to the Pending Transactions. See "The Company -- Pending Transactions".  

                                                        · Enlarge/Download Table

                                                         TOTAL                                  DATE OF    
                      MARKET(A)                          POPS        OWNERSHIP  NET POPS      ACQUISITION  
-----------------------------------------------------  ---------     ---------  ---------     -----------  
                                                                                                           
UPPER MIDWEST CLUSTER                                                                                      
  Duluth, MN/Superior, WI MSA........................    241,467       100.0%     241,467       04/28/94   
  Eau Claire, WI MSA.................................    143,190        97.1%     139,610       04/28/94   
  Wausau, WI MSA.....................................    121,262        94.4%     114,483       03/28/95   
  MN-2A RSA..........................................     38,236       100.0%      38,236       07/07/95   
  MN-3 RSA...........................................     59,388       100.0%      59,388       04/28/94   
  MN-4 RSA...........................................     15,075        49.0%       7,387       07/27/95   
  MN-5 RSA...........................................    205,456       100.0%     205,456       07/07/95   
  MN-6 RSA...........................................    219,149       100.0%     219,149       11/23/94(b)
  WI-1 RSA...........................................    109,248       100.0%     109,248       04/28/94   
  WI-2 RSA...........................................     84,925(c)    100.0%      84,925(c)     pending(d)
  WI-3 RSA...........................................    139,189       100.0%     139,189       11/23/94(b)
  WI-6A RSA..........................................     32,734       100.0%      32,734       11/23/94(b)
  MI-1 RSA...........................................    208,779       100.0%     208,779       03/07/95   

                                                        · Enlarge/Download Table
                                                                                               
MID-ATLANTIC CLUSTER                                                                           
  OH-7 RSA...........................................   254,949  100.0%    254,949  09/27/95   
  OH-10A RSA.........................................    61,785  100.0%     61,785  09/29/95   
  PA-9 RSA...........................................   187,551  100.0%    187,551  02/02/96   
  WV-2 RSA...........................................    79,307  100.0%     79,307  12/20/95   
  WV-3 RSA...........................................   269,413  100.0%    269,413  07/23/96   
NEW YORK CLUSTER                                                                               
  Orange County, NY MSA..............................   324,323  100.0%    324,323   pending(d)
  Poughkeepsie, NY MSA...............................   262,663   94.8%    248,932  04/23/96(e)
  NY-5 RSA...........................................   383,960  100.0%    383,960  12/29/95   
  NY-6 RSA...........................................   111,023  100.0%    111,023  04/23/96   
SBC JOINT VENTURE                                                                              
  Laredo, TX MSA.....................................   168,924   44.5%     75,171  11/30/95(b)
  IL-4 RSA...........................................   216,023   44.5%     96,130  11/30/95(b)
  IL-6 RSA...........................................   199,453   44.5%     88,757  11/30/95(b)
OTHER INTERESTS                                                                                
  Florence, AL MSA...................................   136,816  100.0%    136,816  11/23/94(b)
  AL-1B RSA..........................................    62,035  100.0%     62,035  11/23/94(b)
  Kankakee, IL MSA...................................   102,541   20.0%     20,534  07/09/94   
  Alton/Granite City, IL MSA.........................    21,159   85.6%     18,112  07/07/95   
  Janesville, WI MSA.................................   147,650   12.2%     18,003   pending(d)
  Benton Harbor, MI MSA..............................   161,966   10.0%     16,157  07/09/94   
  Other Minority Interests...........................       n/a    n/a      17,997   pending(d)
                                                      ---------          ---------             
         Total....................................... 4,769,639          4,071,006             
                                                      =========          =========             

---------------                                                                 
(a) All of the Company's licenses are non-wireline licenses with the exception  
  of the licenses for the Laredo, TX MSA, the Florence, AL MSA and the AL-1B
RSA, which are wireline licenses.                                       

(b) Assumes the acquisition of the remaining shares of Cellular Information     
Systems, Inc. ("CIS"). On November 23, 1994, the Company acquired       
approximately 90.8% (on a fully diluted basis) of the equity of CIS and 
   approximately 92.1% (on a fully diluted basis) of the voting power entitled
to vote generally in the election of directors of CIS.                  

(c) Includes the Pops in the WI-2 RSA where the Company has interim operating   
    authority pending the resolution of a dispute, to which the Company is not a
party, between two applicants for the non-wireline cellular license with
respect to the WI-2 RSA. The FCC has awarded the WI-2 RSA construction  
permit to both of the two applicants. The Company's interim operating   
 authority expires upon the earlier of 30 days notice by the applicants or
construction of the applicant's system unless the permit is sold to the 
    Company. Until expiration occurs, the Company is entitled to all revenue and
  income generated by the WI-2 RSA. Both of such applicants have indicated a
   desire to sell such permit to the Company subject to FCC approval, once the
   final order is issued. The Company does not expect the purchase price to be
material. There can be no assurance that the WI-2 Acquisition will be   
consummated.                                                            

 4

424B1
5th Page of 94
TOC
1st
Previous
Next
Bottom
Just 5th

(d) Represents Systems to be acquired by the Company as described under "The    
   Company -- Pending Transactions". These acquisitions are not expected to be
consummated prior to the closing of this Offering. There can be no      
  assurances that the Company will be successful in consummating the Pending
Transactions.                                                           

(e) Includes the Pops associated with the acquisition by the Company of 83.1% of
the Poughkeepsie, NY MSA on April 23, 1996, the Pops associated with the
  pending acquisition by the Company of 11.1% of the Poughkeepsie, NY MSA as
part of the Orange County Exchange and certain other minority interests 
previously acquired by the Company.                                     

ACQUISITION STRATEGY                                                            

The Company's strategy is to continue to expand its current clusters  
through the acquisition of contiguous properties and, secondarily, to target for
purchase other small to mid-sized MSAs and strategic RSAs that it believes are  
undervalued, underdeveloped or that possess traits indicative of potentially    
high cellular usage and superior financial performance. The operation of        
contiguous markets permits the Company to provide broad areas of uninterrupted  
service and achieve certain economies of scale, including certain centralized   
marketing, administrative and engineering functions. The Company believes that  
smaller MSAs and certain RSAs often exhibit a concentration of small businesses,
longer commute times and well-traveled roads, all indicators of strong cellular 
use. Many of these markets serve as hubs for retail trading areas and as        
business, cultural or medical centers for populations spread over wide          
geographic areas. In addition, management believes that because its markets are 
less densely populated, they are less likely to face the level of competition   
expected to be experienced in large urban areas.                                

OPERATING STRATEGY                                                              

    Management believes that each of its Systems and certain of the Systems to
be acquired in the Pending Transactions are in the early stages of their growth 
cycle and afford significant opportunities for improvements in management and   
operating performance. Upon acquiring a cellular system, the Company's operating
strategy is to effect certain management, operational and organizational changes
in order to increase the number and quality of subscribers and enhance operating
cash flow, while controlling subscriber acquisition costs and promoting superior
customer service. The Company seeks to accomplish these changes by employing the
following practices:                                                            

Decentralized Management.                                                   

The Company manages each of its Systems on a decentralized basis,     
delegating direct responsibility for all hiring, marketing, distribution,       
customer service, churn control, billing, roaming and other day-to-day operating
decisions to the general manager of each System. General managers must strictly 
adhere to a budget designed to improve cash flow and reduce churn and their     
compensation is linked to their ability to meet or exceed their budgeted goals. 
The Company believes its decentralized management structure fosters a strong    
sense of customer service and community spirit, enables it to customize its     
marketing strategy to the needs of the local market, and eliminates the need for
a large corporate staff or for a centralized multi-system customer service      
center that is located outside of the local market. The Company believes that   
placing decision-making responsibility in the hands of its general managers     
fosters the decisive actions necessary to meet competitive challenges.          

Aggressive Marketing and Promoting of Cellular Service.                     

  After selectively upgrading the engineering in its cellular network, the
Company implements aggressive marketing programs to increase subscriber         
activations and reduce churn. Many of these programs are designed to distinguish
the Company as the local market's highest quality cellular service provider,    
stressing its localized sales offices, customer service and commitment to the   
community. These programs also include offering distinctive rate plans and      
roaming rates to emphasize "value" and the "advantage" of the Company's cellular
service, launching targeted advertising campaigns aimed at the most attractive  
cellular user segments, creating regional marketing alliances with neighboring  
cellular carriers and taking an active, visible role in community, government   
and charity organizations. Management believes that the Company's positioning of
its cellular system as the local service provider often contrasts with its      
larger competitors, which frequently centralize customer service and other      
functions outside the local market.                                             

 5

424B1
6th Page of 94
TOC
1st
Previous
Next
Bottom
Just 6th

Strong Retail and Direct Sales Effort.                                      

 A key element of the Company's positioning in its markets is its use of
local retail stores, as well as a local direct sales force. A retail location   
complemented by a direct sales force provides the Company with more control over
the sales process than if it were to rely exclusively on independent agents. The
Company has aggressively opened its own retail stores and currently operates in 
excess of 50 retail locations, up from only 13 as of December 31, 1994.         
Management believes that this local presence enhances its ability to provide    
higher quality customer service and that on average customers who purchase      
cellular service directly from the Company through its retail stores and direct 
sales force tend to have fewer complaints and higher usage than subscribers who 
activate with independent agents or independent retailers.                      

Dedication to Customer Service.                                             

The Company strives to maintain a high level of customer satisfaction 
through a variety of techniques, including tying sales commissions to subscriber
retention, outbound telemarketing to subscribers on a regular basis, maintaining
24-hour customer service and active ongoing contact with new customers. The     
Company believes that its emphasis on superior customer service has helped      
reduce its average monthly churn rate. For example, in the 14 Systems owned or  
contracted for by the Company at the time of its initial public offering in     
December 1994 (the "IPO Systems"), the churn rate declined from 2.4% for the six
months ended June 30, 1995 to 1.5% for the six months ended June 30, 1996.      

System Expansion to Increase Signal Coverage.                               

    Where practical, the Company strives to "fill in" the "cellular geographic
service area" or "CGSA" (as defined by the FCC) within its markets by adding    
network facilities to increase the coverage of its radio signal. Under the rules
and regulations of the FCC, expansion of the signal coverage will preserve the  
Company's right to provide cellular service in all areas of its markets. After  
the initial build-out of the market fills in the CGSA, the Company monitors the 
signal coverage and selectively seeks to add cell sites to upgrade the capacity 
and reach of the cellular signal. The contribution by McCaw/AT&T Wireless of a  
substantial amount of capital equipment (including a digital supernode switch   
and approximately 100 cell sites) as part of its initial equity investment in   
1994 has significantly reduced the Company's capital expenditure requirements   
over the last two years.                                                        

SIGNIFICANT PENDING TRANSACTION                                                 

 The Company has filed applications seeking FCC approval for each of the
Pending Transactions. The Company intends to consummate such transactions after 
the grant of FCC approvals, but, in certain cases, prior to the expiration of   
the 40 to 45-day finality period during which FCC approvals are subject to      
reconsideration or review. There can be no assurance that any or all of such    
approvals will be granted, will not be reconsidered or reviewed or that such    
approvals will not be revoked pursuant to any such proceeding. In the unlikely  
event any such approvals are revoked, the Company could be required to refile   
its applications, rescind the acquisition or sell the acquired System. See "The 
Company -- Pending Transactions".                                               

    The Company believes that the Pending Transaction described below supports
the Company's acquisition strategy. The System to be acquired increases the size
of one of the Company's principal operating clusters, more closely surrounds    
major metropolitan markets and affords opportunities for increased marketing and
engineering synergies.                                                          

   The Company has entered into an agreement with Vanguard Cellular Systems,
Inc., pursuant to which it will exchange, subject to certain conditions         
including FCC approval, certain of its Systems in the Mid-Atlantic Cluster for, 
among other things, the Orange County, NY MSA and an additional 11.1% of the    
Company's majority-owned Poughkeepsie, NY MSA. Pursuant to the agreement, the   
Company will exchange an aggregate of 548,016 Net Pops consisting of its OH-9   
RSA, a portion of its OH-10 RSA (excluding Perry and Hocking counties) and the  
Parkersburg, WV/Marietta, OH MSA for the Orange County, NY MSA (324,323 Pops),  
11.1% of the Poughkeepsie, NY MSA (262,663 Pops), 12.2% of the Janesville, WI   
MSA (147,650 Pops) and approximately 23,571 additional Net Pops, including small
interests in the Eau Claire,                                                    

 6

424B1
7th Page of 94
TOC
1st
Previous
Next
Bottom
Just 7th

WI and Wausau, WI MSAs (in each of which the Company currently has a majority   
interest). The Orange County, NY MSA abuts the Company's NY-5 MSA to the north, 
the Company's Poughkeepsie, NY MSA to the east and the New York City MSA of     
McCaw/AT&T Wireless to the south and east (bordering Westchester, Putnam and    
Rockland counties). There can be no assurance that the foregoing transaction,   
which is referred to herein as the "Orange County Exchange", will be            
consummated.                                                                    

OWNERSHIP PROFILE                                                               

PriCellular completed an initial public offering of its Class A Common
Stock in December 1994. Its principal stockholders include members of the family
of Robert Price, President of the Company, McCaw/AT&T Wireless, a subsidiary of 
AT&T Corp. ("AT&T"), Aeneas Venture Corporation, an affiliate of Harvard Private
Capital Group, Inc. and a wholly owned subsidiary of the President and Fellows  
of Harvard College ("Harvard Private Capital"), Spectrum Equity Investors, L.P.,
("Spectrum"), The Thomas H. Lee Company and The Public School Employes'         
Retirement System of Pennsylvania. During 1994 and 1995, these stockholders     
invested in excess of $135 million in exchange for their current equity         
interests. McCaw/AT&T Wireless' investment in the Company consisted of cash,    
minority interests and a significant amount of capital equipment.               

RELATIONSHIP WITH MCCAW/AT&T WIRELESS                                           

    The Company has formed a strategic alliance with McCaw/AT&T Wireless which
allows the Company to take advantage of McCaw/AT&T Wireless' acquisition        
experience, certain vendor discounts and certain services provided by McCaw/AT&T
Wireless including a variety of centralized "back office" functions. In         
connection with its initial investment in the Company, McCaw/AT&T Wireless      
contributed a Northern Telecom digital supernode switch and approximately 100   
cell sites to the Company. The Company believes that the proximity of each of   
its operating clusters to McCaw/AT&T Wireless' Systems affords significant      
opportunities for joint marketing, promotions and other programs. The Company's 
Upper Midwest Cluster is contiguous to McCaw/AT&T Wireless' Systems serving the 
Minneapolis/St. Paul, MN MSA and the St. Cloud, MN MSA. The Company's           
Mid-Atlantic Cluster borders the Pittsburgh, PA, Steubenville, OH MSA and       
Wheeling, WV MSAs, which are owned by McCaw/AT&T Wireless. The Company's New    
York Cluster abuts the northern border of McCaw/AT&T Wireless' New York City    
MSA, including Westchester and Rockland counties. The New York Cluster is also  
adjacent to three MSAs owned by SBC, with whom the Company has a joint venture  
in Illinois and Texas.                                                          

 7

424B1
8th Page of 94
TOC
1st
Previous
Next
Bottom
Just 8th

THE OFFERING

                                                        · Enlarge/Download Table
                                                                                            
Class A Common Stock Offered                                                                
  by Selling Stockholders..... 2,500,000 shares                                             
Class A Common Stock                                                                        
  Outstanding after this                                                                    
  Offering.................... 14,829,674 shares                                            
Class B Common Stock                                                                        
  Outstanding after this                                                                    
  Offering.................... 15,964,596 shares                                            
Total Shares Outstanding...... 30,794,270 shares                                            
Voting Rights................. Holders of Class A Common Stock are entitled to one vote per 
                               share and holders of Class B Common Stock are entitled to 10 
                               votes per share. Holders of the Company's outstanding shares 
                               of Series A Cumulative Convertible Preferred Stock are       
                               entitled to the number of votes equal to the number of shares
                               of Class A Common Stock the holder would receive upon        
                               conversion. Except as otherwise required by law, the Class A 
                               Common Stock, Class B Common Stock and Series A Cumulative   
                               Convertible Preferred Stock will vote together on all matters
                               submitted to a vote of stockholders, including the election  
                               of directors. Immediately following the closing of this      
                               Offering, the outstanding shares of Class A Common Stock will
                               represent approximately 8.1% (8.5% if the Underwriters'      
                               over-allotment option is exercised in full) of the combined  
                               voting power of the outstanding capital stock. See "Principal
                               and Selling Stockholders" and "Description of Capital Stock".
                               The Class A Common Stock and the Class B Common Stock are    
                               collectively referred to herein as "Common Stock". After the 
                               sale of the shares of Class A Common Stock offered hereby,   
                               certain of the Company's existing stockholders that are      
                               parties to a stockholders agreement will, if considered      
                               together, own shares of Common Stock and Series A Cumulative 
                               Convertible Preferred Stock representing approximately 91.0% 
                               (90.6% if the Underwriters' over-allotment option is         
                               exercised in full) of the voting power entitled to vote in   
                               matters affecting stockholders generally and thereby will    
                               continue to be able to control the election of the Company's 
                               Board and generally will be able to direct the affairs of the
                               Company if they act together.                                
Cash Dividends on Common                                                                    
  Stock....................... Holders of Class A Common Stock, Class B Common Stock and    
                               Series A Cumulative Convertible Preferred Stock will be      
                               entitled to share ratably (based on the number of shares of  
                               Class A Common Stock the holder would receive upon conversion
                               in the case of the Series A Cumulative Convertible Preferred 
                               Stock), as a single class, in any dividends declared by the  
                               Company on the Common Stock. The Company does not anticipate 
                               paying dividends on its Common Stock in the foreseeable      
                               future. See "Risk Factors", "Price Range of Class A Common   
                               Stock and Dividend Policy" and "Description of Capital       
                               Stock".                                                      
Conversion of Class B Common                                                                
  Stock....................... Each share of Class B Common Stock is convertible into Class 
                               A Common Stock on a one-for-one basis at any time at the     
                               option of the holder thereof and under certain other         
                               circumstances. See "Description of Capital Stock".           
American Stock Exchange                                                                     
  Symbol...................... "PC" (the Class A Common Stock also trades on the Chicago    
                               Stock Exchange under the symbol "PC.M" and the Pacific Stock 
                               Exchange under the symbol "PC.P").                           

 8

424B1
9th Page of 94
TOC
1st
Previous
Next
Bottom
Just 9th

     Unless otherwise indicated, the information in this Prospectus (i) reflects
the 65-for-1 split of the Class B Common Stock effective September 1994, and the
5-for-4 splits of the Class A Common Stock and Class B Common Stock effective   
August 1995 and March 1996, (ii) assumes no conversion of the Company's         
outstanding shares of Series A Cumulative Convertible Preferred Stock which are 
convertible as of June 30, 1996 into between 7,813,000 and 11,861,000 shares of 
Class A Common Stock, (iii) assumes no conversion of the Company's outstanding  
10 3/4% Senior Subordinated Convertible Discount Notes due 2004 which are       
convertible as of June 30, 1996 into between 3,142,000 and 3,925,000 shares of  
Class A Common Stock, (iv) assumes no exercise of outstanding warrants to       
purchase 1,501,000 shares of Class B Common Stock, (v) assumes no exercise of   
outstanding employee stock options granted under the Company's 1994 Stock Option
Plan to purchase 1,530,000 shares of Class A Common Stock and (vi) assumes no   
exercise of the Underwriters' over-allotment option.                            
------------------------

  FOR UNITED KINGDOM PURCHASERS: The shares of Common Stock offered hereby
may not be offered or sold in the United Kingdom other than to persons whose    
ordinary activities involve them in acquiring, holding, managing or disposing of
investments, whether as principal or agent (except in circumstances that do not 
constitute an offer to the public within the meaning of the Public Offers of    
Securities Regulations 1995 or the Financial Services Act 1986) and this        
Prospectus may only be issued or passed on to any person in the United Kingdom  
if that person is of a kind described in Article 11(3) of the Financial Services
Act 1986 (Investment Advertisements) (Exemptions) Order 1995 or a person to whom
this Prospectus may otherwise lawfully be passed on.                            

 9

424B1
10th Page of 94
TOC
1st
Previous
Next
Bottom
Just 10th

SUMMARY HISTORICAL AND UNAUDITED PRO FORMA
FINANCIAL AND OPERATING DATA

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA) 

   The following table sets forth summary historical and pro forma financial
data for the Company for the periods and as of the dates indicated. The         
unaudited pro forma data is not designed to represent and does not represent    
what the Company's financial position or results of operations actually would   
have been had the transactions described herein under "Unaudited Pro Forma      
Condensed Consolidated Financial Statements" been completed as of the date or at
the beginning of the periods indicated, or to project the Company's financial   
position or results of operations at any future date or for any future period.  
The following data should be read in conjunction with "Selected Financial Data",
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations", "Unaudited Condensed Consolidated Financial Statements" and the    
consolidated financial statements and notes thereto of the Company and certain  
acquired businesses included elsewhere or incorporated by reference herein.     

    The following table also sets forth certain summary operating data for the
Company as of the dates and for the periods indicated.                          

                                                        · Enlarge/Download Table

                                           SIX MONTHS ENDED             YEARS ENDED DECEMBER 31,      
                                            JUNE 30, 1996           --------------------------------- 
                                    ------------------------------    PRO                             
                                        PRO                          FORMA         ACTUAL     ACTUAL  
                                    FORMA(A)(B)       ACTUAL(B)     1995(A)(B)     1995(B)    1994(B) 
                                    -----------     --------------  --------       -------    ------- 
                                                                                                      
STATEMENT OF OPERATIONS DATA:                                                                         
  Revenues.........................  $   49,048        $ 48,368     $ 71,870       $41,504    $ 5,209 
  Cost of services and sales.......      15,512          16,935       22,921        15,645      2,706 
  Selling, general and                                                                                
     administrative................      17,179          15,198       31,556        16,512      6,005 
  Depreciation and amortization....      10,318           9,900       20,050        10,337      2,720 
                                       --------        --------     --------       --------   --------
     Operating income (loss).......       6,039           6,335       (2,657)         (990)    (6,222)
  Other income (expense)...........     (20,688)        (18,637)     (37,160)       (6,721)     4,782 
                                       --------        --------     --------       --------   --------
     Net income (loss).............  $  (14,649)       $(12,302)    $(39,817)      $(7,711)   $(1,440)
                                       ========        ========     ========       ========   ========
     Net income (loss) after                                                                          
       adjustment for accreted                                                                        
       preferred stock dividend....  $  (17,707)       $(15,360)    $(39,817)      $(7,711)   $(1,440)
                                       ========        ========     ========       ========   ========
     Net income (loss) per common                                                                     
       share(c)....................  $     (.58)       $   (.50)    $  (1.43)      $  (.30)   $  (.08)
                                       ========        ========     ========       ========   ========
CERTAIN OPERATING DATA:                                                                               
  EBITDA(d)........................  $   17,339        $ 16,735     $ 19,686       $ 9,867    $(3,599)
  Ending subscribers(e)............     112,458         118,033       87,059        78,227     17,344 
  Ending penetration(f)............         2.8%            2.9%         2.2%          2.2%       1.0%
  Average marketing costs per net                                                                     
     subscriber addition(g)........  $      426        $    372     $    495       $   403    $   n/a 
  Average monthly revenue per                                                                         
     subscriber(h).................  $       80        $     82     $     85       $   107    $   n/a 
  Churn(i).........................         1.8%            1.6%         2.1%          2.3%       n/a 

10

424B1
11th Page of 94
TOC
1st
Previous
Next
Bottom
Just 11th

                                                        · Enlarge/Download Table

                                                                              AS OF JUNE 30, 1996   
                                                                            ------------------------
                                                                            PRO FORMA(J)     ACTUAL 
                                                                            ------------    --------
                                                                                                    
BALANCE SHEET DATA:                                                                                 
  Working capital..........................................................   $ 50,149      $ 51,546
  Net fixed assets.........................................................     58,305        56,248
  Total assets.............................................................    567,955       568,161
  Long-term debt...........................................................    352,463       354,408
  Total liabilities........................................................    375,889       375,911
  Stockholders' equity.....................................................    192,066       192,250

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

(a) Pro forma to reflect the transactions described in "Unaudited Pro Forma     
    Condensed Consolidated Financial Statements" as if each of such transactions
    occurred on January 1, 1995. See "Unaudited Pro Forma Condensed Consolidated
Financial Statements".                                                  

(b) Pro forma results of operations for the year ended December 31, 1995, and   
  the six months ended June 30, 1996, include $1,000 and $500, respectively,
    and historical results of operations include $500 and $500, respectively, in
each case, in other income (expense) attributable to the covenant not to
    compete paid to the Company pursuant to the Lubbock/Minnesota Exchange. Such
covenant not to compete is applicable to the three years following the  
    exchange (1995, 1996 and 1997). Pro forma results of operations for the year
ended December 31, 1995 and the six months ended June 30, 1996, include 
    $1,250 and $625, respectively, in other income (expense) attributable to the
 covenant not to compete to be paid to the Company pursuant to the sale of
 the AL-4 RSA. Such covenant not to compete is applicable to the two years
following the sale.                                                     

(c) Historical loss per share for the year ended December 31, 1994 was computed 
   by using the number of shares of common stock outstanding immediately prior
 to the closing of the initial public offering, after giving effect to the
conversion of the then outstanding Series A and B Convertible Preferred 
 Stock and the exercise of all options and warrants (applying the treasury
 stock method) as if such shares were outstanding on January 1, 1994, plus
the weighted average shares outstanding in connection with the initial  
  public offering. Historical loss per share for the year ended December 31,
    1995 and the six months ended June 30, 1996 and the pro forma loss per share
  for the six months ended June 30, 1996 (as adjusted for the March 1996 and
 August 1995 5-for-4 stock splits) has been computed based on the weighted
   average shares outstanding for the period. Pro forma loss per share for the
year ended December 31, 1995 has been computed, as calculated above,    
    adjusted to reflect the issuance of common stock in connection with the AL-4
RSA and Parkersburg, WV/Marietta, OH MSA acquisitions as if such        
  transactions occurred on January 1, 1995. The historical and pro forma net
 losses per common share for the six months ended June 30, 1996, have been
increased for the impact of the accreted dividends attributable to the  
Company's 6 1/4% Preferred Stock.                                       

(d) EBITDA represents earnings before depreciation and amortization, interest   
   expense, interest income, and gains on sales of cellular properties. EBITDA
    is not intended to be a performance measure and should not be regarded as an
alternative to either operating income or net income as an indicator of 
operating performance or to cash flows as a measure of liquidity.       
    Furthermore, EBITDA is not a GAAP-based financial measure, and it should not
be considered as an alternative to GAAP-based measures of financial     
performance.                                                            

(e) Each billable telephone number in service represents one subscriber, not    
  including test, demonstration or other telephone numbers for which payment
is not expected.                                                        

(f) Represents the ratio of ending subscribers to the estimated total population
of majority owned Systems.                                                      

(g) Determined by dividing the amount of marketing costs for such period by the 
net subscribers added during such period. Marketing cost represents all 
selling expenses and losses incurred on equipment sales.                

(h) Represents the ratio of total service revenues to average monthly           
subscribers.                                                                    

(i) Represents the average of the monthly churn rates during the periods        
presented. Churn equals the ratio of disconnected monthly subscribers to
average monthly subscribers.                                            

(j) Pro forma to reflect each of the transactions described in "Unaudited Pro   
   Forma Condensed Consolidated Financial Statements" and which occurred after
   June 30, 1996 or is pending as if each such transaction occurred as of June
30, 1996. See "Unaudited Pro Forma Condensed Consolidated Financial     
Statements".                                                            

11

424B1
12th Page of 94
TOC
1st
Previous
Next
Bottom
Just 12th

RISK FACTORS

In addition to the other matters described in this Prospectus, the    
prospective purchaser of the Class A Common Stock offered hereby should consider
the specific factors set forth below.                                           

This Prospectus contains statements which constitute forward looking  
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Those statements appear in a number of places in this Prospectus and      
include statements regarding the intent, belief or current expectations of the  
Company, its directors or its officers primarily with respect to the future     
operating performance of the Company. Prospective purchasers of the Class A     
Common Stock are cautioned that any such forward looking statements are not     
guarantees of future performance and involve risks and uncertainties, and that  
actual results may differ materially from those in the forward looking          
statements as a result of various factors. The accompanying information         
contained in this Prospectus, including without limitation the information set  
forth below and the information under the heading "Management's Discussion and  
Analysis of Financial Condition and Results of Operations", identifies important
factors that could cause such differences.                                      

LIMITED OPERATING HISTORY; NET LOSSES                                           

Since its formation, the Company has concentrated on the acquisition, 
exchange, construction, initial operation and development of cellular telephone 
systems. Although the Company has operated cellular telephone systems since     
1989, it has acquired all of its existing Systems between April 1994 and July   
1996. On a pro forma basis, after giving effect to the Recent and Pending       
Transactions and the other transactions described herein under "Unaudited Pro   
Forma Condensed Consolidated Financial Data", the Company would have incurred an
accounting net loss of $39.8 million and $14.6 million for the year ended       
December 31, 1995 and the six months ended June 30, 1996, respectively. There   
can be no assurance that the Company's future operations, individually or in the
aggregate, will generate sufficient earnings to pay its obligations. See        
"Selected Financial Data" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations".                                           

LEVERAGE AND ABILITY TO MEET REQUIRED DEBT SERVICE                              

    The Company considers itself highly leveraged. On a pro forma basis, after
giving effect to the Recent and Pending Transactions and the other transactions 
described herein under "Unaudited Pro Forma Condensed Consolidated Financial    
Statements", for the year ended December 31, 1995 and the six months ended June 
30, 1996, the Company's ratio of EBITDA to total interest expense would have    
been 46% and 76%, respectively, and the Company's deficiency of earnings to     
fixed charges would have been $39.8 million and $14.6 million, respectively. The
Company considers that its high degree of leverage could significantly limit its
ability to make acquisitions, withstand competitive pressures or adverse        
economic conditions, obtain necessary financing or take advantage of business   
opportunities that may arise.                                                   

  The Company's ability to meet its debt service requirements will require
significant and sustained growth in the Company's cash flow. There can be no    
assurance that the Company will be successful in improving its cash flow by a   
sufficient magnitude or in a timely manner or in raising additional equity or   
debt financing to enable the Company to meet its debt service requirements.     

BUSINESS RISKS ASSOCIATED WITH PENDING TRANSACTIONS                             

   The information appearing herein is presented assuming the acquisition by
the Company of 100% of the capital stock of CIS and the consummation of the     
other Pending Transactions. There can be no assurances that the Company will be 
successful in consummating any or all of such acquisitions or the Pending       
Transactions in a timely manner or on the terms described herein.               

 The Company has filed applications seeking FCC approval for each of the
Pending Transactions. The Company may consummate such acquisitions after the    
grant of FCC approval but prior to the expiration of the 40 to 45-day period    
during which FCC approvals are subject to reconsideration or review. There can  
be no assurance that any or all of such approvals will be granted, will not be  
reconsidered or reviewed or that such                                           

12

424B1
13th Page of 94
TOC
1st
Previous
Next
Bottom
Just 13th

approvals will not be revoked pursuant to any such proceeding. In the event any 
such approvals are revoked, the Company could be required to refile its         
applications, rescind the acquisition or otherwise dispose of the System        
acquired pursuant to the acquisition.                                           

   The Company will also be subject to risks that new Systems, including all
of its existing Systems which were acquired since 1994, and the Systems to be   
acquired pursuant to the Pending Transactions, will not perform as expected and 
that the returns from such Systems will not support the indebtedness incurred to
acquire, or the capital expenditures needed to develop, such Systems. See "The  
Company -- Pending Transactions".                                               

COMPETITION                                                                     

The Company competes with one other cellular licensee in each of its  
cellular markets, most of which are larger and have greater financial resources 
than the Company, as well as paging companies and landline telephone service    
providers. Current policies of the FCC authorize only two licensees to operate  
cellular systems in each market, and the Company expects there will continue to 
be competition from the other licensee authorized to serve each cellular market 
in which the Company operates. Competition for subscribers between cellular     
licensees is based principally upon the services and enhancements offered, the  
technical quality of the cellular system, customer service, system coverage and 
capacity and price.                                                             

     As a result of recent regulatory and legislative initiatives, the Company's
cellular operations may face increased competition from entities providing other
communications technologies and services. The Company has no views as to the    
expected success of such competing technologies nor their operational abilities.
While some of these technologies and services are currently operational, others 
are being developed or may be developed in the future. The Company's cellular   
operations may face additional competition from new market entrants such as     
personal communication services ("PCS"). The FCC has decided to offer over 2,000
licenses for PCS use and has completed the initial rounds of its spectrum       
auction process which resulted in the award of two PCS licenses in each Major   
Trading Area ("MTA") and one in each Basic Trading Area ("BTA"). PCS operators  
could compete directly with the Company and may have access to substantial      
capital resources. It is expected that PCS will provide services and features in
addition to those currently provided by cellular companies, and there can be no 
assurance that the Company will be able to provide such services and features or
that it will be able to do so on a timely or profitable basis.                  

 The Company's cellular operations are also expected to face competition
from other technologies developed in the future including, but not limited to,  
mobile satellite systems. In addition, the FCC has licensed Specialized Mobile  
Radio ("SMR") system operators to construct digital mobile communications       
systems on existing SMR frequencies, referred to as enhanced specialized mobile 
radio ("ESMR"), in many cities throughout the United States, including each of  
the cities in which the Company operates. When constructed, ESMR systems could  
be competitive with the Company's cellular service. Accordingly, there can be no
assurance that one or more of the technologies currently utilized by the Company
in its business will not become obsolete at some time in the future. See        
"Business--Competition".                                                        

CONTROL BY EXISTING STOCKHOLDERS                                                

     As of the date of this Prospectus, certain stockholders of the Company that
are party to the stockholders agreement described below, if considered together,
own shares of Common Stock and Series A Cumulative Convertible Preferred Stock  
representing approximately 91.0% of the voting power entitled to vote in matters
affecting stockholders generally and thereby will be able to control the        
election of the board of directors and generally able to direct the affairs of  
the Company if they act together. These stockholders have entered into an       
agreement (the "Stockholders Agreement") providing for the designation by       
certain existing stockholders of directors to be elected to the board of        
directors. The Stockholders Agreement will have the effect of determining the   
composition of the board of directors for the term of the agreement. Pursuant to
the Stockholders Agreement, Mr. Robert Price has the right to designate the     
majority of the members of the board of directors. See "Principal and Selling   
Stockholders".                                                                  

13

424B1
14th Page of 94
TOC
1st
Previous
Next
Bottom
Just 14th

DEPENDENCE ON CORPORATE MANAGEMENT                                              

The Company's decentralized management philosophy delegates day-to-day
operating decisions to the local System managers and, therefore, the Company's  
affairs are managed by a small number of corporate management personnel, the    
loss of any of whom could have an adverse impact on the Company. The Company    
does not have any employment contracts with corporate management personnel other
than Robert Price, the Company's President. Mr. Price concurrently serves as a  
Director and the Chief Executive Officer and President of Price Communications  
Corporation ("Price Communications"). Although PriCellular and Price            
Communications historically have not imposed inconsistent demands on Mr. Price's
availability, there can be no assurances that such conflicts will not arise in  
the future. The success of the Company's operations and expansion strategy      
depends on its ability to retain and to expand its staff of qualified personnel 
in the future. See "Management".                                                

RELIANCE ON USE OF THIRD-PARTY SERVICE MARK                                     

   The Company currently uses the registered service mark CELLULAR ONE(R) to
market the services of its non-wireline Systems. The Company's use of this      
service mark is governed by five-year contracts between the Company and Cellular
One Group, the owner of the service mark. Such contracts expire on various dates
and each is renewable at the option of the Company for three additional         
five-year terms, subject to the attainment of certain customer satisfaction     
ratings. See "Business -- Service Marks". Under these agreements, the Company   
has agreed to meet a consistent set of operating and service quality standards  
for its cellular service areas. If these agreements were not renewed upon       
expiration or if the Company were to fail to meet the applicable operating or   
service quality standards, and therefore was no longer permitted to use the     
CELLULAR ONE(R) service mark, the Company's ability both to attract new         
subscribers and retain existing subscribers could be materially impaired. The   
Company does not anticipate any difficulty in obtaining renewal of its          
agreements with Cellular One Group or in continuing to meet such standards. In  
addition, if for some reason beyond the Company's control, the name CELLULAR    
ONE(R) were to suffer diminished marketing appeal, the Company's ability both to
attract new subscribers and retain existing subscribers could be materially     
impaired. McCaw/AT&T Wireless, which had been the single largest user of the    
CELLULAR ONE(R) brand name, has significantly reduced its use of the brand name 
as a primary service mark.                                                      

LIMITS ON THE COMPANY'S BUSINESS                                                

     The Company has agreed not to effect certain transactions, including, among
others, any acquisition involving more than 10% of the fair market value of the 
Company and certain borrowings, without the prior written consent of each of    
McCaw/AT&T Wireless and Harvard Private Capital, subject to certain conditions  
on the ability of McCaw/AT&T Wireless to withhold such consent. There can be no 
assurances that the Company will be able to obtain any such consents. McCaw/AT&T
Wireless may withhold such consent for any reason, including because it seeks to
acquire such property itself. The failure to obtain such consents could have an 
adverse effect on the Company's business. McCaw/AT&T Wireless and Harvard       
Private Capital have each consented to the Pending Transactions.                

In addition, PriCellular's affiliation with McCaw/AT&T Wireless could 
operate to prohibit PriCellular or McCaw/AT&T Wireless from acquiring certain   
wireless franchises. If McCaw/AT&T Wireless or PriCellular has a pre-existing   
ownership or management interest in a cellular carrier in an MSA or RSA, McCaw/ 
AT&T Wireless or PriCellular would be precluded by FCC regulations from         
acquiring the other carrier in that particular MSA or RSA. McCaw/AT&T Wireless  
and PriCellular may compete by seeking to acquire directly ownership interests  
in certain MSAs or RSAs.                                                        

POTENTIAL FOR ADVERSE REGULATORY CHANGE AND NEED FOR REGULATORY APPROVALS       

  The licensing, construction, operation, acquisition and sale of cellular
systems, as well as the number of cellular and other wireless licensees         
permitted in each market, are regulated by the FCC. Changes in the regulation of
cellular activities (such as a decision by the FCC to permit more than two      
licensees in each cellular market) and other wireless carriers could have a     
material adverse effect on the Company's operations. In addition, all cellular  
licenses in the United States were granted for an initial 10-year term and are  
subject to                                                                      

14

424B1
15th Page of 94
TOC
1st
Previous
Next
Bottom
Just 15th

renewal. The Company's cellular licenses expire in various years from 1997 to   
2001. While the Company believes that each of these licenses will be renewed    
based upon FCC rules establishing a presumption in favor of licensees that have 
complied with their regulatory obligations during the initial license period,   
there can be no assurance that all of the Company's licenses will be renewed.   

FLUCTUATIONS IN MARKET VALUE OF LICENSES                                        

    A substantial portion of the Company's assets consists of its interests in
cellular licenses. The future value of the Company's interest in its cellular   
licenses will depend significantly upon the success of the Company's business.  
While there is a current market for the Company's licenses, such market may not 
exist in the future or the values obtainable may be significantly lower than at 
present. The transfer of interests in such licenses is subject to prior FCC     
approval and is subject to certain rights of first refusal, which may have the  
effect of reducing the value of the licenses. As a consequence, there can be no 
assurance that the proceeds from the liquidation or sale of the Company's assets
would be sufficient to pay the Company's obligations, and a significant         
reduction in the value of the licenses could require a charge to the Company's  
results of operations.                                                          

EQUIPMENT FAILURE; NATURAL DISASTER                                             

 Although the Company carries "business interruption" insurance, a major
equipment failure or a natural disaster affecting any one of the Company's      
central switching offices or certain of its cell sites could have a significant,
adverse effect on the Company's operations.                                     

RADIO FREQUENCY EMISSION CONCERNS                                               

    Media reports have suggested that certain radio frequency ("RF") emissions
from portable cellular telephones may be linked to cancer. Concerns over RF     
emissions may have the effect of discouraging the use of cellular telephones,   
which could have an adverse effect upon the Company's business. The FCC has a   
rulemaking proceeding pending to update the guidelines and methods it uses for  
evaluating RF emissions from radio equipment, including cellular telephones.    
While the proposal would impose more restrictive standards on RF emissions from 
lower power devices such as portable cellular telephones, it is believed that   
all cellular telephones currently marketed and in use by the Company's customers
already comply with the new proposed standards.                                 

POTENTIAL ADVERSE EFFECT ON MARKET PRICE OF SHARES ELIGIBLE FOR FUTURE SALE     

  Sales of the Company's Common Stock in the public market could adversely
affect the market price of the Class A Common Stock. The Company has, and after 
giving effect to this Offering will have, 30,794,270 shares of Common Stock     
outstanding. After giving effect to the Offering, 12,990,264 shares of Class A  
Common Stock will be freely tradeable without restriction (except as to         
affiliates of the Company) and the remaining 1,839,410 shares of Class A Common 
Stock and all 15,964,596 outstanding shares of Class B Common Stock will be     
"restricted securities" as defined in Rule 144 under the Securities Act ("Rule  
144"). After giving effect to this Offering, the holders of 11,314,848 of the   
outstanding shares of Common Stock, the holders of the Series A Cumulative      
Convertible Preferred Stock (which shares are convertible as of June 30, 1996   
into between 7,813,000 and 11,861,000 shares of Common Stock (subject to        
adjustment)) and the holders of the 10 3/4% Senior Subordinated Convertible     
Discount Notes (which notes are convertible as of June 30, 1996 into between    
3,142,000 and 3,925,000 shares of Common Stock) are entitled to certain rights  
with respect to the registration of such shares, or the shares issuable upon    
conversion of any such convertible securities, for offer and sale to the public.
In addition, the Company intends to register up to 2,109,375 shares of Class A  
Common Stock reserved for issuance under its 1994 Stock Option Plan. See "Shares
Eligible for Future Sale".                                                      

15

424B1
16th Page of 94
TOC
1st
Previous
Next
Bottom
Just 16th

THE COMPANY 

PriCellular, through its subsidiaries, owns and operates FCC licensed 
cellular telephone systems in the United States, primarily in smaller MSAs and  
strategically located RSAs. The Company operates its Systems principally in the 
Midwest and Mid-Atlantic regions in addition to markets north of New York City  
and south of Albany, NY. As of June 30, 1996 on an actual basis, the Company    
owned cellular interests representing approximately 4.0 million Net Pops and had
approximately 118,000 subscribers. The Company sells and markets its products   
and services principally under the CELLULAR ONE(R) brand name through a         
distribution network of over 50 full service retail stores, a direct sales force
and a select group of agents. In addition, the Company has formed a strategic   
alliance with McCaw/AT&T Wireless, a principal stockholder, allowing it to take 
advantage of McCaw/AT&T Wireless' acquisition experience, vendor discounts,     
centralized "back office" functions and joint marketing opportunities in markets
which are adjacent to McCaw/AT&T Wireless markets.                              

Through selective acquisitions and asset swaps, the Company has       
concentrated its efforts on creating an integrated network of cellular systems  
in contiguous service areas. After giving effect to the Pending Transactions,   
each of which is subject to certain conditions, including FCC approval, the     
Company will own cellular interests representing approximately 4.0 million Net  
Pops with approximately 112,000 subscribers, representing a penetration rate of 
2.8%. These interests consist principally of three large operating clusters of  
cellular Systems:                                                               

   Upper Midwest Cluster -- a 1.6 million Net Pop cluster of 13 non-wireline
 Systems covering more than 65,000 contiguous square miles in Minnesota,
Wisconsin and Michigan.                                               

Mid-Atlantic Cluster -- an 853,000 Net Pop cluster of five contiguous 
     non-wireline Systems consisting of five RSAs in Ohio, Pennsylvania and West
Virginia covering more than 10,000 contiguous square miles.           

    New York Cluster -- a 1.1 million Net Pop cluster of two MSAs and two RSAs
covering more than 8,000 contiguous square miles in suburban New York 
located between New York City and the Albany, NY MSA of SBC.          

In addition, the Company owns two contiguous Systems in Alabama, a 44.5%        
interest in a joint venture with SBC (which is managed and operated by SBC),    
representing 260,058 Net Pops, and certain other cellular interests.            

   During 1995, the Company's customer base increased from 17,344 to 78,227.
This significant growth in subscribers was due to both acquisitions and         
increased penetration of its existing markets. As of December 31, 1995, revenues
and EBITDA of the Company were $41.5 million and $9.9 million, respectively, and
for the six months ended June 30, 1996 were $48.4 million and $16.7 million,    
respectively, in each case before giving effect to the Pending Transactions and 
the consummation of the WV-3 acquisition. On a pro forma basis, after giving    
effect to the Recent and Pending Transactions, the revenues and EBITDA of the   
Company for 1995 were $71.9 million and $19.7 million, respectively, and for the
six months ended June 30, 1996 were $49.0 million and $17.3 million,            
respectively. See "Unaudited Pro Forma Condensed Consolidated Financial         
Statements".                                                                    

RECENT TRANSACTIONS                                                             

During 1995 and through July 1996, the Company made or agreed to make 
several strategic acquisitions which expanded its Upper Midwest Cluster and     
established the Mid-Atlantic Cluster and the New York Cluster. In addition, in  
July 1996 the Company disposed of a System considered by management to be non-  
strategic.                                                                      

The Mid-Atlantic Cluster Acquisitions                                           

 On September 27, 1995, the Company acquired from United States Cellular
Corporation ("USCC") substantially all of the assets of the System serving the  
OH-7 RSA (254,949 Pops) for $39.5 million in cash.                              

16

424B1
17th Page of 94
TOC
1st
Previous
Next
Bottom
Just 17th

   On December 20, 1995, the Company acquired from USCC substantially all of
the assets of the System serving the WV-2 RSA (79,307 Pops) for $7.8 million in 
cash.                                                                           

  On February 2, 1996, the Company acquired from USCC substantially all of
the assets of the System serving the PA-9 RSA (187,551 Pops) for $26.1 million  
in cash.                                                                        

   On July 23, 1996, the Company acquired the WV-3 RSA (269,413 Pops) from a
subsidiary of Horizon Cellular Telephone Company, L.P. for $35 million in cash. 
The WV-3 RSA is situated directly south of the Company's PA-9 RSA and directly  
east of the Company's WV-2 RSA.                                                 

    During September 1995, the Company acquired the following Systems, each of
which is expected to be disposed of pursuant to the Orange County Exchange. The 
Company acquired from McCaw/AT&T Wireless 98.02% of the System serving the      
Parkersburg, WV/Marietta, OH MSA (154,510 Net Pops) for $9.9 million in cash and
an $8.8 million unsecured five-year, 6% note which was converted into 995,799   
shares of the Company's Class A Common Stock at $8.80 per share. The value of   
the stock on the date of conversion was $9.80. The Company acquired from a      
subsidiary of Sterling Cellular Corporation 100% of the System serving the OH-9 
RSA (279,577 Pops) for $28.9 million in cash. On September 29, 1995, the Company
acquired from Cellular 10, Inc. 100% of the System serving the OH-10 RSA        
(173,714 Pops) for $17.6 million in cash. The foregoing transactions            
collectively are referred to as the "Mid-Atlantic Cluster Acquisitions".        

Expansion of Upper Midwest Cluster                                          

On March 7, 1995, the Company acquired from Buckhead Telephone Company
("BTC") the assets of the System serving the MI-1 RSA (208,779 Pops) for        
approximately $17.7 million in cash. The foregoing transaction is referred to   
herein as the "MI-1 Acquisition".                                               

On March 28, 1995, the Company acquired, pursuant to an agreement (the
"Wausau Purchase Agreement"), a 50.02% general partnership interest and a 0.58% 
limited partnership interest in Wausau Cellular Limited Partnership, a Delaware 
limited partnership that wholly owns the System serving the Wausau, WI MSA      
(114,483 Net Pops) for $5.4 million in cash.                                    

On July 7, 1995, the Company consummated a transaction with Western   
Wireless Corporation ("Western Wireless") pursuant to which the Company         
exchanged the System serving the Lubbock, TX MSA (229,051 Pops) for             
approximately 327,000 Net Pops, most of which are contiguous to the Upper       
Midwest Cluster. The Net Pops acquired consist of the System serving the MN-5   
RSA, the portion of the System serving the MN-3 RSA that the Company did not    
own, a portion of the MN-2 RSA (Beltrami County), approximately 86% of the      
System serving the Alton/Granite City, IL MSA, an additional 10.0% of the System
serving the Eau Claire, WI MSA and an additional 14.5% of the System serving the
Wausau, WI MSA. In addition, Western Wireless agreed to pay the Company $3.0    
million in exchange for the Company's agreement not to compete with Western     
Wireless within the Lubbock, TX MSA for a period of three years following the   
exchange. Western Wireless retained ownership of certain cell sites and other   
capital equipment. The foregoing transaction is referred to herein as the       
"Lubbock/Minnesota Exchange".                                                   

On August 10, 1995, the Company acquired from Louise Hart 49.0% of the
System serving the MN-4 RSA (7,387 Net Pops), for approximately $75,000. In     
addition, the Company entered into an agreement, in accordance with FCC rules,  
to provide management and operation services to the MN-4 RSA.                   

The New York Cluster Acquisition                                            

 On December 29, 1995, the Company acquired from Cellular of Upstate New
York Inc. substantially all of the assets of the System serving the NY-5 RSA    
(383,960 Net Pops) for approximately $65.9 million in cash. The foregoing       
transaction is referred to here as the "NY-5 Acquisition".                      

On April 23, 1996, the Company acquired from subsidiaries of USCC the 
System serving the NY-6 RSA (111,023 Net Pops) and 83% of the System serving the
Poughkeepsie, NY MSA (262,663 Pops). The Company acquired substantially all of  
the assets serving the NY-6 RSA for approximately $19.8 million in cash and 83% 
of the stock of the Dutchess County Cellular Telephone Company serving the      
Poughkeepsie,                                                                   

17

424B1
18th Page of 94
TOC
1st
Previous
Next
Bottom
Just 18th

NY MSA for approximately $38.6 million, with one half paid in cash and the      
balance in a three-year note bearing interest at the prime rate (the            
"Poughkeepsie Note").                                                           

The AL-4 Disposition                                                        

     During July 1996, the Company consummated the sale of its recently-acquired
AL-4 RSA (140,200 Pops) for $27.5 million (of which $2.5 million is allocated to
a two year covenant not to compete) or approximately $200 per Pop. The Company  
acquired this stand-alone RSA in November 1995 from Dominion Cellular, Inc. for 
$10 million in cash and $10 million in a 5-year, 4% Note that was subsequently  
converted into 1,468,860 shares of Class A Common Stock of PriCellular.         

PENDING TRANSACTIONS                                                            

 The Company has filed applications seeking FCC approval for each of the
Pending Transactions. The Company intends to consummate such transactions after 
the grant of FCC approvals, but, in certain cases, prior to the expiration of   
the 40 to 45-day finality period during which FCC approvals are subject to      
reconsideration or review. There can be no assurance that any or all of such    
approvals will be granted, will not be reconsidered or reviewed or that such    
approvals will not be revoked pursuant to any such proceeding. In the unlikely  
event any such approvals are revoked, the Company could be required to refile   
its applications, rescind the acquisition or sell the acquired System.          

    The Company believes that the Pending Transactions described below support
the Company's acquisition strategy. The Systems to be acquired increase the size
of the Company's operating clusters, more closely surround major metropolitan   
markets and afford opportunities for increased marketing and engineering        
synergies.                                                                      

Expansion of the New York Cluster -- The Orange County Exchange             

   The Company has entered into an agreement with Vanguard Cellular Systems,
Inc., pursuant to which it will exchange, subject to certain conditions         
including FCC approval, certain of its Systems in the Mid-Atlantic Cluster for, 
among other things, the Orange County, NY MSA and an additional 11.1% of the    
Company's majority-owned Poughkeepsie, NY MSA. Pursuant to the agreement the    
Company will exchange an aggregate of 548,016 Net Pops consisting of its OH-9   
RSA, a portion of its OH-10 RSA (excluding Perry and Hocking counties) and the  
Parkersburg, WV/Marietta, OH MSA for the Orange County, NY MSA (324,323 Pops),  
11.1% of the Poughkeepsie, NY MSA (262,663 Pops), 12.2% of the Janesville, WI   
MSA (147,650 Pops) and approximately 23,571 additional Net Pops, including small
interests in the Eau Claire, WI and Wausau, WI MSAs (in each of which the       
Company currently has a majority interest). The Orange County, NY MSA abuts the 
Company's NY-5 MSA to the north, the Company's Poughkeepsie, NY MSA to the east 
and the New York City MSA of McCaw/AT&T Wireless to the south and east          
(bordering Westchester, Putnam and Rockland counties). There can be no assurance
that the Orange County Exchange will be consummated.                            

The MI-2 Disposition                                                        

     In a disputed acquisition of November 14, 1994, RFB Cellular, Inc. signed a
contract to acquire the MI-2 RSA (109,612 Pops). The Company believed it should 
have had the right to purchase the property and initiated legal proceedings. In 
May 1995, as a result of this litigation, the Court of Chancery of the State of 
Delaware awarded the Company the right to acquire the MI-2 RSA. The defendant in
the lawsuit appealed the decision. On March 22, 1996, the Delaware Supreme Court
reversed the lower court's decision and ordered the Company to reverse the      
acquisition and sell the license and operating assets to the defendant. The     
Company believes that the loss of MI-2's operating results will not be material 
to the Company's results of operations. The foregoing transaction is referred to
herein as the "MI-2 Disposition".                                               

18

424B1
19th Page of 94
TOC
1st
Previous
Next
Bottom
Just 19th

The WI-2 Acquisition                                                        

  The Company has interim operating authority for the WI-2 RSA pending the
resolution of a dispute, to which the Company is not a party, between two       
applicants for the non-wireline cellular license with respect to the WI-2 RSA.  
The FCC has awarded the WI-2 RSA construction permit to both of the applicants. 
The Company's interim operating authority expires upon the earlier of 30 days   
notice by the applicants or construction of applicant's system unless the permit
is sold to the Company. Both of such applicants have indicated a desire to sell 
such permit to the Company subject to FCC approval, once the final order is     
issued. The Company does not expect the purchase price to be material. There can
be no assurance that the WI-2 Acquisition will be consummated.                  

Remaining Shares of CIS                                                     

   The Company currently intends to acquire all of the outstanding shares of
capital stock of CIS not currently owned by the Company, although the Company is
not required to do so. Such acquisitions may be effected through privately      
negotiated or open market purchases, subsequent tender offers, a merger or      
similar business combination between the Company and CIS or otherwise. As of    
June 30, 1996, there were outstanding approximately 841,000 shares of CIS       
capital stock not owned by the Company, representing approximately 6.7% of the  
fully diluted equity of CIS.                                                    

OWNERSHIP PROFILE                                                               

PriCellular completed an initial public offering of its Class A Common
Stock in December 1994. Its principal stockholders include members of the family
of Robert Price, President of the Company, McCaw/AT&T Wireless, a subsidiary of 
AT&T, Harvard Private Capital, Spectrum, The Thomas H. Lee Company and The      
Public School Employes' Retirement System of Pennsylvania. During 1994 and 1995,
these stockholders invested in excess of $135 million in exchange for their     
current equity interests. McCaw/AT&T Wireless' investment in the Company        
consisted of cash, minority interests and a significant amount of capital       
equipment.                                                                      

RELATIONSHIP WITH MCCAW/AT&T WIRELESS                                           

    The Company has formed a strategic alliance with McCaw/AT&T Wireless which
allows the Company to take advantage of McCaw/AT&T Wireless' acquisition        
experience, certain vendor discounts and certain services provided by McCaw/AT&T
Wireless including a variety of centralized "back office" functions. In         
connection with its initial investment in the Company, McCaw/AT&T Wireless      
contributed a Northern Telecom digital supernode switch and approximately 100   
cell sites to the Company. The Company believes that the proximity of each of   
its operating clusters to McCaw/AT&T Wireless' Systems affords significant      
opportunities for joint marketing, promotions and other programs. The Company's 
Upper Midwest Cluster is contiguous to McCaw/AT&T Wireless' Systems serving the 
Minneapolis/St. Paul, MN MSA and the St. Cloud, MN MSA. The Company's           
Mid-Atlantic Cluster borders the Pittsburgh, PA, Steubenville, OH MSA and       
Wheeling, WV MSAs owned by McCaw/AT&T Wireless. The Company's New York Cluster  
abuts the northern border of McCaw/AT&T Wireless' New York City MSA, including  
Westchester and Rockland Counties. The New York Cluster is also adjacent to     
three MSAs owned by SBC (with whom the Company has a joint venture in Illinois  
and Texas).                                                                     

 The Company was incorporated under the laws of the State of Delaware on
February 20, 1990. The principal executive offices of the Company are located at
45 Rockefeller Plaza, New York, New York 10020, and its telephone number is     
(212) 459-0800.                                                                 

19

424B1
20th Page of 94
TOC
1st
Previous
Next
Bottom
Just 20th

USE OF PROCEEDS 

   The Company will not receive any of the proceeds from the sale of Class A
Common Stock in this Offering. The Company has requested the Selling            
Stockholders to register and sell the shares to be sold in the Offering in order
to increase the liquidity of the Class A Common Stock without diluting existing 
stockholders.                                                                   

PRICE RANGE OF CLASS A COMMON STOCK 
AND DIVIDEND POLICY 

PRICE RANGE OF CLASS A COMMON STOCK                                             

     The Company's Class A Common Stock is listed on the American Stock Exchange
under the symbol "PC". The Company's Class A Common Stock is also traded on the 
Chicago Stock Exchange under the symbol "PC.M" and on the Pacific Stock Exchange
under the symbol "PC.P". The table below sets forth, for the periods indicated, 
the high and low sale prices of the Company's Class A Common Stock as reported  
on the American Stock Exchange. Prior to December 15, 1994, there was no        
established public trading market for any of the Company's securities.          

                                                                · Download Table

                PERIOD                                          HIGH     LOW  
                                                               ------   ------
                                                                              
1994:                                                                         
     Fourth quarter (since initial public offering on                         
       December 15, 1994)....................................  $ 6.24   $ 5.76
1995:                                                                         
     First quarter...........................................  $ 6.32   $ 4.16
     Second quarter..........................................  $ 6.08   $ 4.56
     Third quarter...........................................  $11.20   $ 5.80
     Fourth quarter..........................................  $11.90   $ 9.20
1996:                                                                         
     First quarter...........................................  $13.38   $ 9.00
     Second quarter..........................................  $14.50   $11.75
     Third quarter (through July 30, 1996)...................  $12.75   $10.25

     A recent last sale price for the Class A Common Stock on the American Stock
Exchange is set forth on the cover page of this Prospectus. On July 8, 1996,    
there were 75 holders of record of the Class A Common Stock. The Company        
estimates that there were approximately 3,000 holders of Class A Common Stock   
based upon the number of holders of record and the number of individual         
participants in certain security position listings.                             

 There is no established public trading market for the Company's Class B
Common Stock. On July 8, 1996, there were 19 holders of record of the Class B   
Common Stock.                                                                   

DIVIDEND POLICY                                                                 

     The Company anticipates that any income generated in the foreseeable future
will be retained for the development and expansion of its business and the      
repayment of indebtedness, and therefore does not anticipate paying dividends on
its Common Stock in the foreseeable future. Payment of cash dividends on the    
Common Stock is currently prohibited by certain provisions of the Company's     
financing arrangements. The Company has not paid cash dividends since inception.

20

424B1
21st Page of 94
TOC
1st
Previous
Next
Bottom
Just 21st

CAPITALIZATION

 The following table sets forth as of June 30, 1996 (i) the consolidated
capitalization of the Company and (ii) the unaudited pro forma consolidated     
capitalization of the Company as adjusted for the Recent and Pending            
Transactions and the Offering. This table should be read in conjunction with the
consolidated financial statements of the Company, including the notes thereto,  
the "Unaudited Pro Forma Condensed Consolidated Financial Statements" and notes 
thereto, included elsewhere herein, "Management's Discussion and Analysis of    
Financial Condition and Results of Operations" and "The Company -- Recent       
Acquisitions" and " -- Pending Transactions".                                   

                                                        · Enlarge/Download Table

                                                                        AS OF JUNE 30, 1996    
                                                                     --------------------------
                                                                                     PRO FORMA 
                                                                      ACTUAL        AS ADJUSTED
                                                                     --------       -----------
                                                                          (IN THOUSANDS)       
                                                                                               
Current portion of long-term debt................................... $    389        $  --     
14% Senior Subordinated Discount Notes..............................  137,107          137,107 
10 3/4% Senior Subordinated Convertible Discount Notes..............   38,975           38,975 
12 1/4% Senior Subordinated Discount Notes..........................  156,952          156,952 
Poughkeepsie Note...................................................   19,429           19,429 
Other long-term debt................................................    1,945           --     
                                                                     --------         -------- 
          Total long-term debt (including current portion of                                   
            long-term debt).........................................  354,797          352,463 
                                                                     --------         -------- 
Stockholders' equity:                                                                          
  Preferred Stock, $0.01 par value per share: Authorized 10,000,000                            
     shares; issued and outstanding 96,000 shares Series A                                     
     Cumulative Convertible.........................................        1                1 
  Common Stock, $0.01 par value per share:                                                     
     Class A: Authorized 100,000,000 shares; issued and outstanding                            
      13,575,649 shares actual; 14,829,674 as adjusted..............      136              148 
     Class B: Authorized 20,000,000 shares; issued and outstanding                             
      17,218,621 shares actual; 15,964,596 as adjusted..............      172              160 
Additional paid-in capital..........................................  214,443          214,443 
Retained earnings...................................................  (22,502)         (22,686)
                                                                     --------         -------- 
          Total stockholders' equity................................  192,250          192,066 
                                                                     --------         -------- 
          Total capitalization...................................... $547,047        $ 544,529 
                                                                     ========         ======== 

21

424B1
22nd Page of 94
TOC
1st
Previous
Next
Bottom
Just 22nd

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

   The pro forma financial statements presented below reflect the effects of
adjustments to the historical consolidated financial statements of the Company  
necessary to give pro forma effect to the transactions described as if such     
transactions had occurred on January 1, 1995 for purposes of the unaudited pro  
forma condensed consolidated statements of operations and as of June 30, 1996   
for purposes of the unaudited pro forma condensed consolidated balance sheet.   

                                                                · Download Table

                                                              ACTUAL DATE          
               PROPERTY DESCRIPTION                          OF TRANSACTION        
---------------------------------------------------  ------------------------------
                                                                                   
ACQUISITIONS:                                                                      
 1.  MI-1 RSA......................................  March 7, 1995                 
 2.  Wausau, WI MSA................................  March 28, 1995                
 3.  MN 2-A RSA, MN 3-B RSA, MN-5 RSA and the                                      
     Alton/Granite City, IL MSA....................  July 7, 1995                  
 4.  OH-7 RSA......................................  September 27, 1995            
 5.  WV-2 RSA......................................  December 20, 1995             
 6.  NY-5 RSA......................................  December 29, 1995             
 7.  PA-9 RSA......................................  February 2, 1996              
 8.  NY-6 RSA, Poughkeepsie, NY MSA (83%)..........  April 23, 1996                
 9.  Orange County, NY MSA.........................  Pending                       
10.  WV-3 RSA......................................  July 23, 1996                 
DISPOSITIONS:                                                                      
11.  Abilene, TX MSA...............................  January 6, 1995               
12.  AL-4 RSA......................................  July 1, 1996                  
13.  MI-2 RSA......................................  Disposition expected pursuant 
                                                     to court order of March 22,   
                                                     1996                          
OTHER:                                                                             
14.  Exchange of Lubbock, TX MSA for Minnesota                                     
     properties (see 3 above)......................  July 7, 1995                  
15.  SBC Joint Venture.............................  November 30, 1995             
16.  Disposition of OH-9 RSA, OH-10B RSA and                                       
     Parkersburg, WV/Marietta, OH MSA..............  Pending                       
17.  Issuance of 10 3/4% Notes, 12 1/4% Notes and                                  
     Poughkeepsie Note.............................  August 21, 1995               
                                                     September 27, 1995 and        
                                                     April 23, 1996                

 The unaudited pro forma condensed consolidated statements of operations
give effect to the above listed transactions under the purchase method of       
accounting.                                                                     

  The unaudited pro forma condensed consolidated financial statements have
been prepared by the Company's management. The unaudited pro forma data is not  
designed to represent and does not represent what the Company's results of      
operations or financial position would have been had the aforementioned         
transactions been completed on or as of the dates assumed, and are not intended 
to project the Company's results of operations for any future period or as of   
any future date. The unaudited pro forma condensed consolidated financial       
statements should be read in conjunction with the audited and unaudited         
consolidated financial statements and notes of the Company and certain acquired 
businesses included elsewhere or incorporated by reference herein.              

    The unaudited pro forma condensed consolidated financial statements do not
give effect to the pending acquisition of the WI-2 RSA. Because the Company has 
interim operating authority for the WI-2 RSA pending the resolution of a        
dispute, to which the Company is not a party, between two applicants for the    
license to the WI-2 RSA, the Company's historical financial information includes
all revenue and income generated by the WI-2 RSA. The Company does not expect   
the purchase price for the WI-2 RSA to be material to the Company's financial   
position.                                                                       

22

424B1
23rd Page of 94
TOC
1st
Previous
Next
Bottom
Just 23rd

PRICELLULAR CORPORATION 

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)

                                                        · Enlarge/Download Table

                                                                                                                        HISTORICAL
                                                                                                                        -------   
                                                                                                                        PENDING   
                                                                                                                      ACQUISITIONS
                                                                                                                         AS OF    
                                                                                  PRO FORMA              PRO FORMA       JUNE     
                                                                                 ADJUSTMENTS            FOR RECENT        30,     
                                                        HISTORICAL               FOR RECENT            ACQUISITIONS     1996(2)   
                                               -----------------------------    ACQUISITIONS           AND THE DEBT     -------   
                                                                 RECENT            AND THE              FINANCINGS      ORANGE    
                                               PRICELLULAR   ACQUISITIONS(1)   DEBT FINANCINGS          AS ADJUSTED     COUNTY    
                                               -----------   ---------------   ---------------         -------------    -------   
                                                                                                                                  
REVENUES.....................................   $  48,368        $ 3,496          $  (3,682)(f)(g)       $  48,182      $ 5,243   
COSTS AND EXPENSES:                                                                                                               
 Cost of cellular service....................      12,520            845               (991)(g)             12,374          665   
 Cost of equipment sold......................       4,415            288               (248)(g)              4,455          171   
 Selling, general and administrative.........      15,198          1,306               (687)(g)             15,817        2,599   
 Depreciation and amortization...............       9,900            399               (315)(b)(g)           9,984          480   
                                                     ----           ----             ------                 ------        -----   
                                                   42,033          2,838             (2,241)                42,630        3,915   
                                                     ----           ----             ------                 ------        -----   
Operating income (loss)......................       6,335            658             (1,441)                 5,552        1,328   
Other income (expense)                                                                                                            
 Interest expense, net.......................     (19,137)          (454)            (1,204)(c)(g)(h)      (20,795)      (1,842)  
 Other income (expense)......................         500           (143)               625(i)                 982                
                                                     ----           ----             ------                 ------        -----   
Total other income (expense).................     (18,637)          (597)              (579)               (19,813)      (1,842)  
                                                     ----           ----             ------                 ------        -----   
Net income (loss)............................   $ (12,302)       $    61          $  (2,020)             $ (14,261)     $  (514)  
                                                     ====           ====             ======                 ======        =====   
Net income (loss) after adjustment for                                                                                            
 accreted Preferred Stock dividend...........   $ (15,360)                                               $ (17,319)               
                                                 --------                                                ---------                
                                                 --------                                                ---------                
Net (loss) per common share(dd)..............   $    (.50)                                               $    (.56)               
                                                 --------                                                ---------                
                                                 --------                                                ---------                
Weighted average number of Common Shares used                                                                                     
 in computation of net income (loss) per                                                                                          
 share.......................................  30,796,000                                               30,796,000                
                                                 --------                                                ---------                
                                                 --------                                                ---------                



                                                           PRO FORMA                                                              
                                                          ADJUSTMENTS                                                             
                                                          FOR PENDING                                                             
                                                WV-3      TRANSACTIONS         PRO FORMA                                          
                                               -------    ------------        -----------                                         
                                               <                                                                                  
REVENUES.....................................  $ 2,474      $ (6,851)(m)       $  49,048                                          
COSTS AND EXPENSES:                                                                                                               
 Cost of cellular service....................      275        (1,855)(m)          11,459                                          
 Cost of equipment sold......................      169          (742)(m)           4,053                                          
 Selling, general and administrative.........    1,152        (2,389)(m)          17,179                                          
 Depreciation and amortization...............      630          (776)(l)(m)       10,318                                          
                                                ------        ------              ------                                          
                                                 2,226        (5,762)             43,009                                          
                                                ------        ------              ------                                          
Operating income (loss)......................      248        (1,089)              6,039                                          
Other income (expense)                                                                                                            
 Interest expense, net.......................     (839)        1,806(k)(n)       (21,670)                                         
 Other income (expense)......................                                        982                                          
                                                ------        ------              ------                                          
Total other income (expense).................     (839)        1,806             (20,688)                                         
                                                ------        ------              ------                                          
Net income (loss)............................  $  (591)     $    717           $ (14,649)                                         
                                                ======        ======              ======                                          
Net income (loss) after adjustment for                                                                                            
 accreted Preferred Stock dividend...........                                  $ (17,707)                                         
                                                                                --------                                          
                                                                                --------                                          
Net (loss) per common share(dd)..............                                  $    (.58)                                         
                                                                                --------                                          
                                                                                --------                                          
Weighted average number of Common Shares used                                                                                     
 in computation of net income (loss) per                                                                                          
 share.......................................                                 30,796,000                                          
                                                                                --------                                          
                                                                                --------                                          

---------------                                                                 
(1) See supplemental unaudited condensed combined statement of operations for   
the six months ended June 30, 1996 on page 31 for details of Recent     
Acquisitions.                                                           

(2) Subsequent to June 30, 1996, the WV-3 Acquisition was consummated.          

23

424B1
24th Page of 94
TOC
1st
Previous
Next
Bottom
Just 24th

PRICELLULAR CORPORATION 

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)

                                                        · Enlarge/Download Table

                                                                                                                     HISTORICAL    
                                                                                                                 ------------------
                                                                                                                      PENDING      
                                                                           PRO FORMA               PRO FORMA        ACQUISITIONS   
                                                                          ADJUSTMENTS             FOR RECENT           AS OF       
                                                 HISTORICAL               FOR RECENT             ACQUISITIONS     JUNE 30, 1996(2) 
                                        -----------------------------    ACQUISITIONS            AND THE DEBT    ------------------
                                                          RECENT            AND THE               FINANCINGS     ORANGE            
                                        PRICELLULAR   ACQUISITIONS(1)   DEBT FINANCINGS           AS ADJUSTED    COUNTY      WV-3  
                                        -----------   ---------------   ---------------          -------------   -------    -------
                                                                                                                                   
REVENUES..............................  $    41,504       $26,898         $  (7,054)(a)(f)(g)(j)   $  61,348    $ 9,145    $ 4,237 
COSTS AND EXPENSES:                                                                                                                
 Cost of cellular service.............       10,694         6,141            (2,096)(a)(g)           14,739       1,310        599 
 Cost of equipment sold...............        4,951         1,811              (537)(a)(g)            6,225         572        514 
 Selling, general and                                                                                                              
   administrative.....................       16,512        11,376            (1,540)(a)(g)           26,348       4,314      2,069 
 Depreciation and amortization........       10,337         4,134             2,236(a)(b)(g)         16,707       1,233      1,172 
                                           --------       -------          --------                --------     -------    ------- 
                                             42,494        23,462            (1,937)                 64,019       7,429      4,354 
                                           --------       -------          --------                --------     -------    ------- 
Operating Income (loss)...............         (990)        3,436            (5,117)                 (2,671)      1,716       (117)
Other income (expense)                                                                                                             
 Interest expense, net................      (18,839)       (2,439)          (16,425)(c)(g)(h)       (37,703)     (4,073)    (1,598)
 Other income (expense)...............          520            23             1,750(d)(i)             2,293                        
 Gain on sale of investments in                                                                                                    
   cellular operations................       11,598                         (11,598)(e)                                            
                                           --------       -------          --------                --------     -------    ------- 
Total other income (expense)..........       (6,721)       (2,416)          (26,273)                (35,410)     (4,073)    (1,598)
                                           --------       -------          --------                --------     -------    ------- 
Net income (loss).....................  $    (7,711)      $ 1,020         $ (31,390)              $ (38,081)    $(2,357)   $(1,715)
                                           ========       =======          ========                ========     =======    ======= 
Net income (loss) after adjustment for                                                                                             
 accreted preferred stock dividends...  $    (7,711)                                              $ (38,081)                       
                                            -------                                               ---------                        
                                            -------                                               ---------                        
Net income (loss) per share...........  $      (.30)                                              $   (1.37)                       
                                            -------                                               ---------                        
                                            -------                                               ---------                        
Weighted average number of Common                                                                                                  
 Shares used in computation of net                                                                                                 
 income (loss) per share(cc)..........   25,771,000                                              27,863,000                        
                                            -------                                               ---------                        
                                            -------                                               ---------                        



                                         PRO FORMA                                                                                 
                                        ADJUSTMENTS                                                                                
                                        FOR PENDING                                                                                
                                        TRANSACTIONS         PRO FORMA                                                             
                                        ------------        -----------                                                            
                                        <                                                                                          
REVENUES..............................    $ (2,860)(m)       $  71,870                                                             
COSTS AND EXPENSES:                                                                                                                
 Cost of cellular service.............        (719)(m)          15,929                                                             
 Cost of equipment sold...............        (319)(m)           6,992                                                             
 Selling, general and                                                                                                              
   administrative.....................      (1,175)(m)          31,556                                                             
 Depreciation and amortization........         938(l)(m)        20,050                                                             
                                           -------            --------                                                             
                                            (1,275)             74,527                                                             
                                           -------            --------                                                             
Operating Income (loss)...............      (1,585)             (2,657)                                                            
Other income (expense)                                                                                                             
 Interest expense, net................       3,921(k)(n)       (39,453)                                                            
 Other income (expense)...............                           2,293                                                             
 Gain on sale of investments in                                                                                                    
   cellular operations................                                                                                             
                                           -------            --------                                                             
Total other income (expense)..........       3,921             (37,160)                                                            
                                           -------            --------                                                             
Net income (loss).....................    $  2,336           $ (39,817)                                                            
                                           =======            ========                                                             
Net income (loss) after adjustment for                                                                                             
 accreted preferred stock dividends...                       $ (39,817)                                                            
                                                              --------                                                             
                                                              --------                                                             
Net income (loss) per share...........                       $   (1.43)                                                            
                                                              --------                                                             
                                                              --------                                                             
Weighted average number of Common                                                                                                  
 Shares used in computation of net                                                                                                 
 income (loss) per share(cc)..........                      27,863,000                                                             
                                                              --------                                                             
                                                              --------                                                             

---------------                                                                 
(1) See supplemental unaudited condensed combined statement of operations for   
the year ended December 31, 1995 on page 32 for details of Recent       
Acquisitions.                                                           

(2) Subsequent to June 30, 1996, the WV-3 Acquisition was consummated.          

24

424B1
25th Page of 94
TOC
1st
Previous
Next
Bottom
Just 25th

PRICELLULAR CORPORATION 
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1996 
(DOLLARS IN THOUSANDS)

                                                        · Enlarge/Download Table

                                                                                            HISTORICAL                
                                                                              --------------------------------------- 
                                                                                               ORANGE                 
                                                                              PRICELLULAR      COUNTY          WV-3   
                                                                              --------        --------        ------- 
                                                                                                                      
ASSETS                                                                                                                
Current assets:                                                                                                       
 Cash and cash equivalents................................................... $ 54,993        $      3        $   156 
 Accounts receivable, net....................................................   13,872           1,006            569 
 Inventory...................................................................    1,946             171             55 
 Prepaid expenses and other current assets...................................      710             159             33 
                                                                              --------        --------        ------- 
     Total current assets....................................................   71,521           1,339            813 
Net fixed assets.............................................................   56,248           4,715          2,226 
Investment in cellular operations............................................   37,629           2,763                
Cellular licenses, net.......................................................  357,085                         12,816 
Cellular licenses held for sale..............................................   33,226                                
Deferred financing costs, net................................................   10,621                                
Other assets.................................................................    1,831              12            597 
                                                                              --------        --------        ------- 
     Total assets............................................................ $568,161        $  8,829        $16,452 
                                                                              =========       =========       ========
LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                  
Current liabilities:                                                                                                  
 Accounts payable and accrued expenses....................................... $ 15,383        $    338        $   365 
 Long-term debt -- current portion...........................................      389                                
 Income taxes payable........................................................      521                                
 Other current liabilities...................................................    3,682          32,729         15,819 
                                                                              --------        --------        ------- 
     Total current liabilities...............................................   19,975          33,067         16,184 
Long-term debt...............................................................  354,408                                
Other long-term liabilities..................................................    1,528              47                
                                                                              --------        --------        ------- 
     Total liabilities.......................................................  375,911          33,114         16,184 
Stockholders' equity (deficit)...............................................  192,250         (24,285)           268 
                                                                              --------        --------        ------- 
Total liabilities and stockholders' equity (deficit)......................... $568,161        $  8,829        $16,452 
                                                                              =========       =========       ========



                                                                               PRO FORMA                              
                                                                              ADJUSTMENTS           PRO FORMA         
                                                                              -----------          -----------        
                                                                                                                      
ASSETS                                                                                                                
Current assets:                                                                                                       
 Cash and cash equivalents...................................................  $     283(o)         $  55,435         
 Accounts receivable, net....................................................     (2,788)(p)           12,659         
 Inventory...................................................................       (285)(q)            1,887         
 Prepaid expenses and other current assets...................................        (42)(r)              860         
                                                                              -----------          -----------        
     Total current assets....................................................     (2,832)              70,841         
Net fixed assets.............................................................     (4,884)(s)           58,305         
Investment in cellular operations............................................                          40,392         
Cellular licenses, net.......................................................     17,783(t)           387,684         
Cellular licenses held for sale..............................................    (33,226)(u)                0         
Deferred financing costs, net................................................                          10,621         
Other assets.................................................................     (2,328)(v)              112         
                                                                              -----------          -----------        
     Total assets............................................................  $ (25,487)           $ 567,955         
                                                                              ============         ============       
LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                  
Current liabilities:                                                                                                  
 Accounts payable and accrued expenses.......................................  $  (1,048)(w)        $  15,038         
 Long-term debt -- current portion...........................................       (389)(x)                0         
 Income taxes payable........................................................                             521         
 Other current liabilities...................................................    (47,097)(y)            5,133         
                                                                              -----------          -----------        
     Total current liabilities...............................................    (48,534)              20,692         
Long-term debt...............................................................     (1,945)(z)          352,463         
Other long-term liabilities..................................................      1,159(aa)            2,734         
                                                                              -----------          -----------        
     Total liabilities.......................................................    (49,320)             375,889         
Stockholders' equity (deficit)...............................................     23,833(bb)          192,066         
                                                                              -----------          -----------        
Total liabilities and stockholders' equity (deficit).........................  $ (25,487)           $ 567,955         
                                                                              ============         ============       

25

424B1
26th Page of 94
TOC
1st
Previous
Next
Bottom
Just 26th

NOTES TO UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS 
(DOLLARS IN THOUSANDS)

For purposes of determining the pro forma effect of the transactions  
described above on the Company's unaudited Condensed Consolidated Statements of 
Operations for the six months ended June 30, 1996 and audited Consolidated      
Statement of Operations for the year ended December 31, 1995, the following     
adjustments have been made:                                                     

                                                        · Enlarge/Download Table

                                                               SIX MONTHS      YEAR ENDED  
                                                                 ENDED        DECEMBER 31, 
                                                             JUNE 30, 1996        1995     
                                                             --------------   ------------ 
                                                                                           
(a)  Represents the results of operations of the Lubbock                                   
     system for the period January 1, 1995 to July 7, 1995                                 
     and the results of operations of the Laredo System                                    
     which was contributed to the SBC Joint Venture on                                     
     November 30, 1995.                                                                    
     Revenues..............................................                     $   (7,680)
     Cost of Cellular service..............................                         (1,623)
     Cost of equipment sold................................                           (330)
     Selling, general and administrative...................                         (1,104)
     Depreciation and amortization.........................                         (1,432)
(b)  Represents the incremental depreciation and                                           
     amortization due to the application of purchase price                                 
     accounting resulting from increases in the basis of                                   
     the assets that resulted from the acquisition of                                      
     Wausau, MI-1, MN-2A, MN-3B, MN-5, Alton/Granite City,                                 
     OH-7, WV-2, NY-5, PA-9, NY-6 and Poughkeepsie, NY.                                    
     Fixed assets are depreciated over a useful life of                                    
     three to seven years. Cellular licenses are amortized                                 
     over 40 years.........................................     $       455     $    3,995 
(c)  Represents amortization of the deferred financing                                     
     costs, as well as the adjustments to interest expense                                 
     to give effect to the issuance of the 10 3/4% Senior                                  
     Subordinated Convertible Discount Notes issued during                                 
     1995, the issuance of the 12 1/4% Senior Subordinated                                 
     Discount Notes issued during 1995, the issuance of the                                
     Poughkeepsie Note issued in April 1996, and the                                       
     elimination of certain interest expense of Wausau,                                    
     MI-1, MN-2A, MN-3B, MN-5, Alton/Granite City, OH-7,                                   
     WV-2, NY-5, PA-9, NY-6 and Poughkeepsie as a result of                                
     debt not assumed as a part of these acquisitions.                                     
       Amortization of deferred financing costs............                     $     (649)
       Interest expense for the 10 3/4% Senior Subordinated                                
          Convertible Discount Notes.......................     $      (142)        (2,702)
       Interest expense for the 12 1/4% Senior Subordinated                                
          Discount Notes...................................            (900)       (13,734)
       Interest expense for the Poughkeepsie Note..........            (534)        (1,457)
       Elimination of historical interest expense, net as a                                
          result of debt not assumed as part of the                                        
          following acquisitions:                                                          
     MN-2A, MN-3B, MN-5 and Alton/Granite City.............                            496 
     OH-7..................................................                            326 
     WV-2..................................................                            156 
     NY-5..................................................                           (154)
     PA-9..................................................                            305 
     NY-6..................................................               6             38 
     Poughkeepsie..........................................             448          1,272 
                                                             --------------   ------------ 
                                                                $    (1,122)    $  (16,103)
                                                             ==============   ============ 
(d)  Represents additional income attributable to the                                      
     covenant not to compete pursuant to the                                               
     Lubbock/Minnesota Exchange............................                     $      500 
(e)  Represents the elimination of the gain on the sale of                                 
     the Company's interest in the Abilene, TX MSA.........                     $  (11,598)

26

424B1
27th Page of 94
TOC
1st
Previous
Next
Bottom
Just 27th

NOTES TO UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

                                                        · Enlarge/Download Table

                                                               SIX MONTHS      YEAR ENDED  
                                                                 ENDED        DECEMBER 31, 
                                                             JUNE 30, 1996        1995     
                                                             --------------   ------------ 
                                                                                           
(f)  Represents the share of income from the SBC Joint                                     
     Venture in accordance with the Joint Venture                                          
     Agreement.............................................     $       450     $    3,025 
(g)  Represents the elimination of the results of                                          
     operations of the MI-2 and AL-4 systems.                                              
       Revenues............................................     $    (4,132)    $   (1,644)
       Cost of cellular service............................            (991)          (473)
       Cost of equipment sold..............................            (248)          (207)
       Selling, general and administrative.................            (687)          (436)
       Depreciation and amortization.......................            (770)          (327)
       Interest expense, net...............................             133            107 
(h)  Represents the loss of interest income attributable to                                
     a decrease in cash on hand due to the purchase of NY-6                                
     and Poughkeepsie......................................     $      (215)    $     (429)
(i)  Represents additional income attributable to the                                      
     covenant not to compete pursuant to the sale of                                       
     AL-4 .................................................     $       625     $    1,250 
(j)  Represents the elimination of revenues earned in                                      
     connection with the Management Agreement associated                                   
     with the purchase of AL-4.............................                     $     (755)
(k)  Represents the elimination of certain interest expense                                
     of Orange County and WV-3 as a result of debt not                                     
     assumed as a part of these acquisitions.                                              
     Orange County.........................................     $     1,842     $    4,073 
     WV-3..................................................             839          1,598 
                                                             --------------   ------------ 
                                                                $     2,681     $    5,671 
                                                             ==============   ============ 
(l)  Represents the incremental depreciation and                                           
     amortization due to the application of purchase price                                 
     accounting resulting from increases in the basis of                                   
     the assets that resulted from the acquisition of                                      
     Orange County and WV-3. Fixed assets are depreciated                                  
     over a useful life of three to seven years. Cellular                                  
     licenses are amortized over 40 years..................     $       378     $    1,585 
(m)  Represents the elimination of the results of                                          
     operations of OH-9, OH-10 and Parkersburg,                                            
     WV/Marietta, OH systems which will be exchanged.                                      
     Revenues..............................................     $    (6,851)    $   (2,860)
     Cost of cellular service..............................          (1,855)          (719)
     Cost of equipment sold................................            (742)          (319)
     Selling, general and administrative...................          (2,389)        (1,175)
     Depreciation and amortization.........................          (1,154)          (647)
(n)  Represents the loss of interest income attributable to                                
     a decrease in cash on hand due to the purchase of                                     
     WV-3 .................................................     $      (875)    $   (1,750)

27

424B1
28th Page of 94
TOC
1st
Previous
Next
Bottom
Just 28th

NOTES TO UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

For purposes of determining the pro forma effect of the transactions  
described above on the Company's unaudited Condensed Consolidated Balance Sheet 
as of June 30, 1996, the following adjustments have been made:                  

                                                        · Enlarge/Download Table
                                                                                           
(o)  CASH AND CASH EQUIVALENTS                                                             
     Purchase of WV-3............................................................ $(33,250)
     Proceeds from sale of AL-4..................................................   27,500 
     Proceeds from disposition of MI-2...........................................    6,192 
     Total cash not acquired in connection with the above acquisitions...........     (159)
                                                                                  $    283 
(p)  ACCOUNTS RECEIVABLE                                                                   
     Receivables not acquired in connection with the Orange County exchange...... $   (248)
     Receivables sold or exchanged in the following transactions:                          
     MI-2........................................................................     (561)
     AL-4........................................................................     (536)
     OH-9........................................................................     (583)
     OH-10.......................................................................     (420)
     Parkersburg.................................................................     (440)
                                                                                  -------- 
                                                                                  $ (2,788)
                                                                                  ======== 
(q)  INVENTORY                                                                             
     Represents inventory not acquired with the Orange County exchange........... $   (171)
     Represents the elimination of inventory disposed of in the following                  
       transactions:                                                                       
     MI-2........................................................................      (51)
     AL-4........................................................................      (63)
                                                                                  -------- 
                                                                                  $   (285)
                                                                                  ======== 
(r)  PREPAID EXPENSES AND OTHER CURRENT ASSETS                                             
     Represents the elimination of prepaid expenses and other current assets               
       disposed of in the following transactions:                                          
     MI-2........................................................................ $     (1)
     AL-4........................................................................       (5)
     OH-9........................................................................      (14)
     OH-10.......................................................................       (8)
     Parkersburg.................................................................      (14)
                                                                                  -------- 
                                                                                  $    (42)
                                                                                  ======== 
(s)  NET FIXED ASSETS                                                                      
     Represents the decrease in net fixed assets due to the sale and disposition           
       of the following:                                                                   
     OH-9........................................................................ $ (2,020)
     OH-10.......................................................................   (1,652)
     Parkersburg.................................................................   (1,212)
                                                                                  -------- 
                                                                                  $ (4,884)
                                                                                  ======== 

28

424B1
29th Page of 94
TOC
1st
Previous
Next
Bottom
Just 29th

NOTES TO UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

                                                        · Enlarge/Download Table
                                                                                           
(t)  CELLULAR LICENSES, NET                                                                
     Represents the increase in Cellular licenses due to the application of                
       purchase price accounting for the following acquisition:                            
     WV-3........................................................................ $ 19,841 
     Represents the adjustment to cellular licenses resulting from the Orange              
       County Exchange...........................................................   (2,058)
                                                                                  -------- 
                                                                                  $ 17,783 
                                                                                  ======== 
(u)  CELLULAR LICENSES HELD FOR SALE                                                       
     Represents the decrease in Cellular licenses held for sale due to the sale            
       and disposition of the AL-4 RSA and MI-2 RSA:                                       
     AL-4........................................................................ $(24,983)
     MI-2........................................................................   (8,243)
                                                                                  -------- 
                                                                                  $(33,226)
                                                                                  ======== 
(v)  OTHER ASSETS                                                                          
     Represents the elimination of funds placed in escrow for the WV-3                     
       acquisition............................................................... $ (1,750)
     Represents the elimination of other assets not acquired in the WV-3                   
       acquisition...............................................................     (571)
     Represents the decrease in other assets due to sale and disposition of the            
       following:                                                                          
     MI-2........................................................................       (4)
     AL-4........................................................................       (2)
     OH-9........................................................................       (1)
                                                                                  -------- 
                                                                                  $ (2,328)
                                                                                  ======== 
(w)  ACCOUNTS PAYABLE AND ACCRUED EXPENSES                                                 
     Represents the decrease in accounts payable and accrued expenses due to the           
       sale and disposition of the following:                                              
     MI-2........................................................................ $   (324)
     AL-4........................................................................     (386)
     Represents the elimination of accounts payable and accrued expenses not               
       acquired in connection with the Orange County Exchange....................     (338)
                                                                                  -------- 
                                                                                  $ (1,048)
                                                                                  ======== 
(x)  LONG-TERM DEBT -- CURRENT PORTION                                                     
     Represents the decrease in Long-Term Debt -- Current Portion due to the               
       disposition of MI-2....................................................... $   (389)
(y)  OTHER CURRENT LIABILITIES                                                             
     Represents the elimination of affiliated payables not being acquired in the           
       following acquisitions:                                                             
     WV-3........................................................................ $(15,618)
     Orange County...............................................................  (32,671)
     Represents the current unearned portion of the two year covenant not to               
       compete received in connection with the sale of AL-4......................    1,250 
     Represents the elimination of other current liabilities not being acquired            
       in connection with the Orange County Exchange.............................      (58)
                                                                                  -------- 
                                                                                  $(47,097)
                                                                                  ======== 

29

424B1
30th Page of 94
TOC
1st
Previous
Next
Bottom
Just 30th

NOTES TO UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS)

                                                        · Enlarge/Download Table
                                                                                            
(z)  LONG-TERM DEBT                                                                         
     Represents the decrease in Long-Term Debt due to the disposition of MI-2....  $ (1,945)
                                                                                   ======== 
(aa) OTHER LONG-TERM LIABILITIES                                                            
     Represents the long-term unearned portion of the two year covenant not to              
       compete received in connection with the sale of AL-4......................  $  1,250 
     Represents the decrease in other long-term liabilities due to the                      
       disposition or exchange of the following:                                            
     MI-2........................................................................        (9)
     AL-4........................................................................       (19)
     OH-9........................................................................       (31)
     OH-10.......................................................................       (11)
     Parkersburg.................................................................       (21)
                                                                                   -------- 
                                                                                   $  1,159 
                                                                                   ======== 
(bb) STOCKHOLDERS' EQUITY                                                                   
     Represents the loss on sale of AL-4.........................................  $   (184)
     Represents the elimination of net equity (deficit) in connection with the              
       following acquisitions:                                                              
     WV-3........................................................................      (268)
     Orange County...............................................................    24,285 
                                                                                   -------- 
                                                                                   $ 23,833 
                                                                                   ======== 
(cc) WEIGHTED AVERAGE SHARES OUTSTANDING                                                    
     The weighted average number of common shares used in computation of net income (loss)  
       per share for the year ended December 31, 1995 under the caption Pro Forma for       
       Recent Acquisitions As Adjusted and under the caption Pro Forma have been computed   
       using the weighted average shares outstanding for the period, adjusted to reflect    
       the issuance of common stock in connection with the AL-4 and Parkersburg,            
       WV/Marietta, OH MSA acquisitions as if such transactions occurred on January 1,      
       1995.                                                                                
(dd) NET LOSS PER COMMON SHARE                                                              
     The net loss per common share for the six months ended June 30, 1996 was increased for 
       the impact of the accreted dividends attributable to the Company's 6 1/4% Preferred  
       Stock.                                                                               

30

424B1
31st Page of 94
TOC
1st
Previous
Next
Bottom
Just 31st

PRICELLULAR CORPORATION 
SUPPLEMENTAL UNAUDITED CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR RECENT ACQUISITIONS 
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(DOLLARS IN THOUSANDS)

                                                        · Enlarge/Download Table

                                                              HISTORICAL                         
                                                   --------------------------------              
                                                         RECENT ACQUISITIONS            TOTAL    
                                                   --------------------------------     RECENT   
                                                   PA-9      NY-6      POUGHKEEPSIE  ACQUISITIONS
                                                   ----     ------     ------------  ------------
                                                                                                 
Revenues.......................................... $206     $1,228        $2,062        $3,496   
Costs and expenses:                                                                              
  Cost of cellular service........................   70        371           404           845   
  Cost of equipment sold..........................   15         92           181           288   
  Selling, general and administrative.............   62        449           795         1,306   
  Depreciation and amortization...................   28        213           158           399   
                                                   ----     ------     ------------  ------------
                                                    175      1,125         1,538         2,838   
                                                   ----     ------     ------------  ------------
Operating income (loss)...........................   31        103           524           658   
Other income (expense)                                                                           
  Interest expense, net...........................              (6)         (448)         (454)  
  Other income (expense)..........................               5          (148)         (143)  
                                                   ----     ------     ------------  ------------
Total other income (expense)......................    0         (1)         (596)         (597)  
                                                   ----     ------     ------------  ------------
Net income (loss)................................. $ 31     $  102        $  (72)       $   61   
                                                   ====     ======     ==========    =========   

31

424B1
32nd Page of 94
TOC
1st
Previous
Next
Bottom
Just 32nd

PRICELLULAR CORPORATION 
SUPPLEMENTAL UNAUDITED CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
FOR RECENT ACQUISITIONS 
(DOLLARS IN THOUSANDS)

                                                        · Enlarge/Download Table

                                                                                      HISTORICAL                                  
                                                     ---------------------------------------------------------------------------- 
                                                                                 RECENT ACQUISITIONS                              
                                                     ---------------------------------------------------------------------------- 
                                                                        MN-2A, MN-3B,                                             
                                                                       MN-5 AND ALTON                                             
                                                                        GRANITE CITY,                                             
                                                     MI-1    WAUSAU          IL            OH-7       WV-2       NY-5       PA-9  
                                                     ----   --------   ---------------    ------     ------     ------     ------ 
                                                                                                                                  
Revenues............................................ $558     $612         $ 1,224        $3,126     $  688     $9,926     $1,789 
Costs and expenses:                                                                                                               
 Cost of cellular service...........................   96      153             290           363        239      1,808        339 
 Cost of equipment sold.............................  111       66               0           239          4        440        231 
 Selling, general and administrative................  132      150             776         1,294        325      4,140        847 
 Depreciation and amortization......................  129      105             690           282        145      1,572        296 
                                                     ----     ----         -------        ------      -----     ------     ------ 
                                                      468      474           1,756         2,178        713      7,960      1,713 
                                                     ----     ----         -------        ------      -----     ------     ------ 
Operating income (loss).............................   90      138            (532)          948        (25)     1,966         76 
Other income (expense)                                                                                                            
 Interest expense, net..............................                          (496)         (326)      (156)       154       (305)
 Other income (expense).............................                                           6          4         11          6 
                                                     ----     ----         -------        ------      -----     ------     ------ 
Total other income (expense)........................    0        0            (496)         (320)      (152)       165       (299)
                                                     ----     ----         -------        ------      -----     ------     ------ 
Net income (loss)................................... $ 90     $138         $(1,028)       $  628     $ (177)    $2,131     $ (223)
                                                     ====     ====         =======        ======      =====     ======     ====== 


                                                               HISTORICAL                                                         
                                                     -------------------------------------                                        
                                                           RECENT ACQUISITIONS                                                    
                                                     -------------------------------------                                        
                                                                                 TOTAL                                            
                                                                                RECENT                                            
                                                      NY-6     POUGHKEEPSIE   ACQUISITIONS                                        
                                                     ------    -----------    -----------                                         
                                                     <C                                                                           
Revenues............................................ $3,786      $ 5,189        $26,898                                           
Costs and expenses:                                                                                                               
 Cost of cellular service...........................    663        2,190          6,141                                           
 Cost of equipment sold.............................    258          462          1,811                                           
 Selling, general and administrative................  1,324        2,388         11,376                                           
 Depreciation and amortization......................    444          471          4,134                                           
                                                     ------      -------        -------                                           
                                                      2,689        5,511         23,462                                           
                                                     ------      -------        -------                                           
Operating income (loss).............................  1,097         (322)         3,436                                           
Other income (expense)                                                                                                            
 Interest expense, net..............................    (38)      (1,272)        (2,439)                                          
 Other income (expense).............................    (17)          13             23                                           
                                                     ------      -------        -------                                           
Total other income (expense)........................    (55)      (1,259)        (2,416)                                          
                                                     ------      -------        -------                                           
Net income (loss)................................... $1,042      $(1,581)       $ 1,020                                           
                                                     ======      =======        =======                                           

32

424B1
33rd Page of 94
TOC
1st
Previous
Next
Bottom
Just 33rd

SELECTED FINANCIAL DATA 

(Dollars in thousands, except per share data) 

The Company acquired all of its existing Systems in a series of       
acquisitions between April 1994 and July 1996. Accordingly, the following       
historical financial data is not necessarily indicative of future results of    
operations. The selected financial data set forth below for the Company for the 
six months ended June 30, 1996 and 1995 have been prepared on the same basis as 
the audited consolidated financial statements and contain all adjustments,      
consisting of normal recurring adjustments that the Company considers necessary 
for a fair presentation of the financial position and results of operations for 
the periods presented. The selected financial data set forth below for the      
Company for the years ended December 31, 1995, 1994 and 1993 and as of December 
31, 1995 and 1994 is derived from, and qualified by reference to, the audited   
consolidated financial statements included elsewhere herein. The selected       
financial data set forth below for the Company as of and for the years ended    
December 31, 1992 and 1991, and as of December 31, 1993 is derived from audited 
consolidated financial statements not included elsewhere herein. The selected   
financial data set forth below should be read in conjunction with the "Unaudited
Pro Forma Condensed Consolidated Financial Statements", "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and the          
consolidated financial statements of the Company included elsewhere herein.     

                                                        · Enlarge/Download Table

                                        SIX MONTHS                                                                             
                                      ENDED JUNE 30,                             YEARS ENDED DECEMBER 31,                      
                                 ------------------------   ------------------------------------------------------------------ 
                                    1996          1995         1995          1994          1993          1992          1991    
                                 ----------    ----------   ----------    ----------    ----------    ----------    ---------- 
                                                                                                                               
STATEMENT OF OPERATIONS DATA:                                                                                                  
  Revenues...................... $   48,368    $   13,661   $   41,504    $    5,209    $    3,809    $    4,859    $    2,274 
 Cost of cellular service.......     12,520         3,733       10,694         1,892           835         1,265           742 
 Cost of equipment sold.........      4,415         1,499        4,951           814           255           411           317 
                                   --------      --------     --------       -------      --------        ------       ------- 
 Gross margin...................     31,433         8,429       25,859         2,503         2,719         3,183         1,215 
 General and administrative.....      7,674         3,021        9,048         4,854         1,280         3,272         1,744 
 Sales and marketing............      7,524         2,007        7,464         1,151           379           517           545 
 Depreciation and                                                                                                              
   amortization.................      9,900         3,999       10,337         2,720         1,695         3,089         3,157 
                                   --------      --------     --------       -------      --------        ------       ------- 
 Operating profit (loss)........      6,335          (598)        (990)       (6,222)         (635)       (3,695)       (4,231)
 Gain on sale of investments in                                                                                                
   cellular operations..........                   11,598       11,598         6,819        11,986         2,557               
 Interest expense, net..........    (19,137)       (6,668)     (18,839)       (1,940)         (470)         (572)          (97)
 Other income (expense), net....        500            20          520           (97)         (240)         (855)         (586)
 Net income (loss).............. $  (12,302)   $    4,352   $   (7,711)   $   (1,440)   $   10,616    $   (2,565)   $   (4,914)
                                   ========      ========     ========       =======      ========        ======       ======= 
 Net income (loss) after                                                                                                       
   adjustment for accreted                                                                                                     
   Preferred Stock dividend..... $  (15,360)   $    4,352   $   (7,711)   $   (1,440)   $   10,616    $   (2,565)   $   (4,914)
                                   ========      ========     ========       =======      ========        ======       ======= 
 Net income (loss) per common                                                                                                  
   share........................ $     (.50)   $      .17   $     (.30)   $     (.08)   $      .56    $     (.14)   $     (.26)
                                   ========      ========     ========       =======      ========        ======       ======= 
 Shares outstanding(1).......... 30,796,000    25,086,000   25,771,000    18,419,000    18,980,000    18,980,000    18,980,000 
                                   ========      ========     ========       =======      ========        ======       ======= 

                                                        · Enlarge/Download Table

                                                 AS OF                             AS OF DECEMBER 31,                        
                                                JUNE 30,   ------------------------------------------------------------------
                                                  1996        1995          1994          1993          1992          1991   
                                               ----------  ----------    ----------    ----------    ----------    ----------
                                                                                                                             
BALANCE SHEET DATA:                                                                                                          
  Working capital (deficit)...................   $ 51,546    $116,415      $ 26,488        $ (139)      $ 3,277       $ 3,311
  Net fixed assets............................     56,248      52,041        26,144           389         1,700         1,556
  Total assets................................    568,161     544,766       215,744         6,755        19,719        20,698
  Long-term debt..............................    354,408     315,216       113,683         4,000         6,410         6,793
  Total liabilities...........................    375,911     339,038       137,508         4,680        10,144         8,558
  Stockholders' equity........................    192,250     205,728        78,236         2,075         9,575        12,140

---------------                                                                 
(1) Shares outstanding for the three years ended December 31, 1993 (as adjusted 
    for the March, 1996 and August 1995 5-for-4 stock splits) have been computed
based upon the number of shares of common stock outstanding immediately 
   prior to the closing of the initial public offering, after giving effect to
the conversion of Series A and B Convertible Preferred Stock and the    
  exercise of all options and warrants outstanding (applying to the treasury
   stock method) as if such shares were outstanding on January 1, 1991. Shares
   outstanding for the year ended December 31, 1994 was computed using the pro
forma shares as calculated above, plus the weighted average shares      
outstanding in connection with the initial public offering. Shares      
 outstanding for the year ended December 31, 1995 and the six months ended
June 30, 1996 and 1995 were computed using the weighted average shares  
outstanding for the period.                                             

33

424B1
34th Page of 94
TOC
1st
Previous
Next
Bottom
Just 34th

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
AND RESULTS OF OPERATIONS 

GENERAL                                                                         

Due to the synergies associated with operating contiguous markets     
("clusters") the development of the cellular industry has been marked by a high 
volume of acquisitions, divestitures and exchanges of Systems among cellular    
system operators. Consistent with this experience and as a result of its effort 
to acquire such clusters, as of December 31, 1994, the Company no longer owned  
any of the Systems reflected in its historical results of operations for the    
years ended December 31, 1991, 1992 or 1993. As a result, the historical        
financial data of the Company discussed below is not comparable nor is it       
indicative of future results of operations.                                     

Cellular systems typically experience losses and negative cash flow in
their initial years of operation. Although the Company generated net income and 
positive cash flow for the year ended December 31, 1993 (primarily as a result  
of the sale of the Company's cellular systems), as noted above, the Company no  
longer owns the Systems reflected in such results of operations. For the years  
ended December 31, 1994 and 1995, and the six months ended June 30, 1996 and    
1995, the Company incurred net losses (except for the six months ended June 30, 
1995 as a result of the gain on sale during January, 1995). The Company expects 
to continue to incur net losses for several years.                              

HISTORICAL RESULTS OF OPERATIONS                                                

Six Months Ended June 30, 1996 Compared With Six Months Ended June 30, 1995 

  Revenues for the six months ended June 30, 1996 increased to $48,368,000
(consisting of cellular service revenues of $44,711,000, equipment sales        
revenues of $1,543,000 and other revenues of $2,114,000) from $13,661,000       
(consisting of cellular service revenues of $13,097,000 and equipment sales     
revenues of $564,000).                                                          

   Total operating expenses for the six months ended June 30, 1996 increased
to $42,033,000 (consisting of cost of cellular service of $12,520,000, cost of  
equipment sold of $4,415,000, general and administrative expenses of $7,674,000,
sales and marketing expenses of $7,524,000 and depreciation and amortization of 
$9,900,000) from $14,259,000 (consisting of cellular service of $3,733,000, cost
of equipment sold of $1,499,000, general and administrative expenses of         
$3,021,000, sales and marketing expenses of $2,007,000 and depreciation and     
amortization of $3,999,000).                                                    

   The principal factor contributing to the increases in revenues, operating
expenses and operating income was the Company's acquisition of a significant    
portion of its existing systems after June 30, 1995, results of which are       
therefore included in the results for the current six month period but not in   
the same period of the prior year.                                              

   Other income (expense) includes for 1995 a gain on the sale of investment
in cellular operations of $11,598,000 resulting from the disposition of the     
Company's interest in the non-wireline system serving the Abilene, TX, MSA.     

Interest expense, net increased to $19,137,000 from $6,668,000 due    
primarily to the Company's issuance of $205,000,000 face amount of Senior       
Subordinated Discount Notes at 12 1/4% in September 1995 and $60,000,000 face   
amount of Senior Subordinated Convertible Discount Notes at 10 3/4% in August   
1995.                                                                           

Other income for the current six month period consists of $500,000    
resulting from the Company's agreement not to compete with Western Wireless     
within the Lubbock, TX, MSA. The noncompete agreement is $3,000,000 for a period
of three years.                                                                 

 There is no income tax provision for the six months ended June 30, 1995
primarily due to the Company fully utilizing its NOLs.                          

34

424B1
35th Page of 94
TOC
1st
Previous
Next
Bottom
Just 35th

Year Ended December 31, 1995 Compared to the Year Ended December 31, 1994   

   Operating revenues of $5,209,000 (consisting of cellular service revenues
of $4,825,000 and equipment sales of $384,000) for the year ended December 31,  
1994 represented the operations of the markets acquired in 1994 from their      
respective dates of acquisition on April 28, 1994 and November 23, 1994, whereas
operating revenues of $41,504,000 (consisting of cellular service revenues of   
$38,757,000 equipment sales of $1,717,000 and other revenues of $1,030,000) for 
the year ended December 31, 1995 represented operations of the markets acquired 
in 1994 for a full year, as well as operations of the markets acquired during   
1995 from their respective dates of acquisition in March, July, September,      
November and December 1995. In addition, other revenues in 1995 consist of      
management fee income of $755,000 related to the Company's interim management of
the AL-4 RSA property prior to the consummation of the Company's acquisition of 
such property on November 7, 1995 and $275,000 of net income from the SBC Joint 
Venture for the month of December 1995.                                         

   Total costs and expenses incurred for the year ended December 31, 1995 of
$42,494,000 increased during 1995 from $11,431,000. This increase was due to the
inclusion of a full year of costs and expenses related to the properties        
acquired during 1994 whereas, in 1994, costs and expenses related to such       
properties were only included since the dates of acquisition. In addition, total
costs and expenses in 1995 included amounts related to the markets acquired     
during 1995 for which there are no comparable amounts in 1994. Cost of cellular 
service increased to $10,694,000 in 1995 from $1,892,000 in 1994 due to the     
larger number of acquired markets in operation incurring system telephone       
expenses and rental expenses on leased facilities. Cost of equipment sold       
increased to $4,951,000 in 1995 from $814,000 in 1994 due to an increased number
of phones being sold in 1995. General and administrative expenses increased to  
$9,048,000 in 1995 from $4,854,000 in 1994 due primarily to costs associated    
with operating new markets and opening numerous administrative and retail       
offices in 1995. Sales and marketing expenses increased in 1995 to $7,464,000   
from $1,151,000 in 1994 due to aggressive marketing kickoff campaigns for       
certain newly acquired markets. Depreciation and amortization increased to      
$10,337,000 in 1995 from $2,720,000 in 1994 due to the larger amount of         
equipment and intangible assets than were owned in 1994.                        

Gain on sale of investments in cellular operations in 1995 and 1994 of
$11,598,000 and $6,819,000, respectively, were due to the disposition of the    
Company's interest in the non-wireline system serving the Abilene, TX MSA and   
the sale of the Company's remaining interest in the Wichita Falls System,       
respectively.                                                                   

    Interest expense of $22,953,000 in 1995, increased from $2,236,000 in 1994
due primarily to the increase in the average amount of indebtedness outstanding 
during the year ended December 31, 1995. Interest expense in 1995 includes a    
full year of interest expense on the 14% Senior Subordinated Discount Notes     
issued in November 1994, as compared to approximately five weeks of interest    
expense in 1994. In addition, interest expense in 1995 also includes interest   
expense related to the 12 1/4% Senior Subordinated Discount Notes issued in     
September 1995 and the 10 3/4% Senior Subordinated Convertible Discount Notes   
issued in August 1995, for which there are no comparable amounts in 1994. The   
Company expects interest expense to increase significantly because the debt     
issued during 1995 will be outstanding for all of 1996.                         

Year Ended December 31, 1994 Compared to the Year Ended December 31, 1993   

    During the third quarter of 1993, the Company (i) sold a 49.5% interest in
the Wichita Falls System, (ii) sold the FCC licenses for the Texas-6 RSA (the   
"Texas-6 License") and the South Dakota-7 RSA (the "South Dakota-7 License") and
(iii) exchanged the FCC license for the Louisiana-8 RSA (the "Louisiana-8       
License") for the Abilene System. Accordingly, operating revenues of $3,809,000 
(consisting of cellular service revenues of $3,702,000 and equipment sales of   
$107,000) for the year ended December 31, 1993 were attributable to the disposed
four operating properties mentioned above, whereas operating revenues of        
$5,209,000 (consisting of cellular service revenues of $4,825,000 and equipment 
sales of $384,000) for the year ended December 31, 1994 represented the         
operations of the newly acquired markets since their respective dates of        
acquisition on April 28, 1994 and November 23, 1994.                            

  Total costs and expenses incurred in the year ended December 31, 1994 of
$11,431,000 increased from $4,444,000. The majority of the 1994 total costs and 
expenses related to the newly acquired Systems while the                        

35

424B1
36th Page of 94
TOC
1st
Previous
Next
Bottom
Just 36th

total costs and expenses in 1993 related to the Systems sold as mentioned above.
Costs of cellular service increased to $1,892,000 in 1994 from $835,000 in 1993 
due to the larger number of newly acquired markets in operation incurring system
telephone expenses and rental expenses on leased facilities. Cost of equipment  
sold increased to $814,000 in 1994 from $255,000 in 1993 due to an increased    
number of phones being sold in 1994. General and administrative expenses        
increased to $4,854,000 from $1,280,000 primarily due to costs associated with  
operating new markets and opening numerous administrative and retail offices in 
1994. Sales and marketing expenses increased in 1994 to $1,151,000 from $379,000
in 1993 due to aggressive marketing kickoff campaigns for certain newly acquired
Systems. Depreciation and amortization increased to $2,720,000 in 1994 from     
$1,695,000 in 1993 due to the larger amount of equipment and intangibles        
(acquired in 1994) than were owned in 1993.                                     

  Gain on sale of investments in cellular operations of $6,819,000 in 1994
related to the sale of the Company's remaining interest in the Wichita Falls    
System as compared to the $11,986,000 gain on the sale of the Company's 49.5%   
interest in the Wichita Falls System, the Texas-6 License, the South Dakota-7   
License and the Company's minority interests in 1993.                           

     Interest expense of $2,236,000 in 1994, increased from $458,000 in 1993 due
to the increase in the average amount of indebtedness outstanding (resulting    
primarily from the Senior Subordinated Discount Notes issued in 1994) during the
year ended December 31, 1994. The Company expects 1995 interest expense to      
increase significantly as the Notes were outstanding for approximately 5 weeks  
in 1994 and will be outstanding for all of 1995.                                

A provision for income taxes in 1994 was not required as the Company  
incurred a net taxable loss. The 1993 tax expense was due to alternative minimum
tax incurred due to the Company utilizing a portion of its net operating loss   
carryforwards.                                                                  

LIQUIDITY AND CAPITAL RESOURCES                                                 

  The cellular telephone business requires substantial capital to acquire,
construct and expand cellular telephone systems and to fund operating           
requirements. The Company historically has financed its acquisitions and other  
capital needs through the proceeds received from the issuance of debt           
securities, the sale of equity interests, borrowings, vendor credit facilities  
and more recently operating cash flow. As of June 30, 1996, the Company had     
$54,993,000 of cash and cash equivalents and $51,546,000 of working capital.    

    During February 1996, the Company acquired substantially all of the assets
of the system serving the PA-9 RSA (which represents 188,000 Pops) for $139 per 
Pop or $26,100,000 in cash. The PA-9 RSA abuts the Company's WV-2 RSA and       
McCaw/AT&T's Pittsburgh, PA MSA.                                                

    During April 1996, the Company consummated the acquisition of the NY-6 RSA
consisting of approximately 111,000 Pops for approximately $19,800,000.         
Additionally, the Company acquired 83% of the Poughkeepsie, NY MSA which has    
approximately 263,000 Pops for approximately $38,900,000, with one-half paid in 
cash and the balance in a three-year prime note with a bullet maturity.         

     During July 1996, the Company consummated the sale of its recently acquired
AL-4 RSA for $27,500,000 in cash or $200 per Pop.                               

     On July 23, 1996, the Company acquired the WV-3 RSA which has approximately
269,000 Pops for approximately $35,000,000 in cash. The WV-3 RSA abuts the      
Company's PA-9 RSA and the Company's WV-2 RSA.                                  

The Company has reached agreement, pursuant to which it will exchange 
certain of its Systems for, among other things, the Orange County, NY MSA and an
additional 11.1% of the Company's majority-owned Poughkeepsie, NY MSA. Pursuant 
to the agreement, the Company will exchange an aggregate of 548,016 Net Pops    
consisting of its OH-9 RSA, a portion of its OH-10 RSA (excluding Perry and     
Hocking counties) and the Parkersburg, WV/Marietta, OH MSA for the Orange       
County, NY MSA (324,323 Pops), 11.1% of the Poughkeepsie, NY MSA (262,663 Pops),
12.2% of the Janesville, WI MSA (147,650 Pops) and approximately 23,571         
additional net Pops, including small interests in the Eau Claire, WI and Wausau,
WI                                                                              

36

424B1
37th Page of 94
TOC
1st
Previous
Next
Bottom
Just 37th

MSAs (in each of which the Company currently has a majority interest). The      
Orange County, NY MSA abuts the Company's NY-5 RSA to the north, the Company's  
Poughkeepsie, NY MSA to the east and the New York City MSA of McCaw/AT&T        
Wireless to the south and east (bordering Westchester, Putnam and Rockland      
counties). The exchange is subject to, among other things, FCC approval.        

 In connection with the pending disposition of the MI-2 RSA, the Company
expects to receive gross proceeds of approximately $6 million.                  

 The Company has expanded its marketing efforts significantly over prior
periods, including but not limited to, the increased use of funds for           
advertising, cellular telephone inventory purchases and other expenditures      
relating to subscriber growth.                                                  

The Company has plans for future growth through acquisition which may 
require additional financing. Although the Company has historically been able to
obtain such financing, there is no guarantee that such financing will continue  
to be available.                                                                

Impact of Recently Issued Accounting Standard                               

In March 1995, the FASB issued Statement No. 121, Accounting for the  
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,    
which requires impairment losses to be recorded on long-lived assets used in    
operations when indicators of impairment are present and the undiscounted cash  
flows estimated to be generated by those assets are less than the assets'       
carrying amount. Statement 121 also addresses the accounting for long-lived     
assets that are expected to be disposed of. The Company adopted Statement 121 in
the first quarter of 1996 and, the effect of adoption was not material.         

37

424B1
38th Page of 94
TOC
1st
Previous
Next
Bottom
Just 38th

BUSINESS

GENERAL                                                                         

PriCellular, through its subsidiaries, owns and operates FCC licensed 
cellular telephone systems in the United States, primarily in smaller MSAs and  
strategically located RSAs. The Company operates its Systems principally in the 
Midwest and Mid-Atlantic regions in addition to markets north of New York City  
and south of Albany, NY. As of June 30, 1996 on an actual basis, the Company    
owned cellular interests representing approximately 4.0 million Net Pops and had
approximately 118,000 subscribers. The Company sells and markets its products   
and services principally under the CELLULAR ONE(R) brand name through a         
distribution network of over 50 full service retail stores, a direct sales force
and a select group of agents. In addition, the Company has formed a strategic   
alliance with McCaw/AT&T Wireless, a principal stockholder, allowing it to take 
advantage of McCaw/AT&T Wireless' acquisition experience, vendor discounts,     
centralized "back office" functions and joint marketing opportunities in markets
which are adjacent to McCaw/AT&T Wireless markets.                              

Through selective acquisitions and asset swaps, the Company has       
concentrated its efforts on creating an integrated network of cellular systems  
in contiguous service areas. After giving effect to the Pending Transactions,   
each of which is subject to certain conditions, including FCC approval, the     
Company will own cellular interests representing approximately 4.0 million Net  
Pops with approximately 112,000 subscribers, representing a penetration rate of 
2.8%. These interests consist principally of three large operating clusters of  
cellular Systems:                                                               

    Upper Midwest Cluster -- a 1.6 million Net Pop cluster of 13
        non-wireline Systems covering more than 65,000 contiguous square
miles in Minnesota, Wisconsin and Michigan.             

  Mid-Atlantic Cluster -- an 853,000 Net Pop cluster of five
        contiguous non-wireline Systems consisting of five RSAs in Ohio,
           Pennsylvania and West Virginia covering more than 10,000 contiguous
square miles.                                           

         New York Cluster -- a 1.1 million Net Pop cluster of two MSAs and
    two RSAs covering more than 8,000 contiguous square miles in
          suburban New York located between New York City and the Albany, NY
MSA of SBC.                                             

  In addition, the Company owns two contiguous Systems in Alabama, a 44.5%
interest in a joint venture with SBC (which is managed and operated by SBC),    
representing 260,058 Net Pops, and certain other cellular interests.            

   During 1995, the Company's customer base increased from 17,344 to 78,227.
This significant growth in subscribers was due to both acquisitions and         
increased penetration of its existing markets. As of December 31, 1995, revenues
and EBITDA of the Company were $41.5 million and $9.9 million, respectively, and
for the six months ended June 30, 1996 were $48.4 million and $16.7 million,    
respectively, in each case before giving effect to the Pending Transactions and 
the consummation of the WV-3 acquisition. On a pro forma basis, after giving    
effect to the Recent Transactions and the Pending Transactions, the revenues and
EBITDA of the Company for 1995 were $71.9 million and $19.7 million,            
respectively, and for the six months ended June 30, 1996 were $49.0 million and 
$17.3 million, respectively. See "Unaudited Pro Forma Condensed Consolidated    
Financial Statements".                                                          

BUSINESS STRATEGY                                                               

Acquisition Strategy                                                        

The Company's strategy is to continue to expand its current clusters  
through the acquisition of contiguous properties and, secondarily, to target for
purchase other small to mid-sized MSAs and strategic RSAs that it believes are  
undervalued, underdeveloped or that possess traits indicative of potentially    
high cellular usage and superior financial performance. The operation of        
contiguous markets permits the Company to provide broad areas of uninterrupted  
service and achieve certain economies of scale, including certain centralized   
marketing,                                                                      

38

424B1
39th Page of 94
TOC
1st
Previous
Next
Bottom
Just 39th

administrative and engineering functions. The Company believes that smaller MSAs
and certain RSAs often exhibit a concentration of small businesses, longer      
commute times and well-travelled roads, all indicators of strong cellular use.  
Many of these markets serve as hubs for retail trading areas and as business,   
cultural or medical centers for populations spread over wide geographic areas.  
In addition, management believes that because its markets are less densely      
populated, they are less likely to face the level of competition expected to be 
experienced in large urban areas.                                               

Operating Strategy                                                          

    Management believes that each of its Systems and certain of the Systems to
be acquired in the Pending Transactions are in the early stages of their growth 
cycle and afford significant opportunities for improvements in management and   
operating performance. Upon acquiring a cellular system, the Company's operating
strategy is to effect certain management, operational and organizational changes
in order to increase the number and quality of subscribers and enhance operating
cash flow, while controlling subscriber acquisition costs and promoting superior
customer service. The Company seeks to accomplish these changes by employing the
following practices:                                                            

     Decentralized Management.  The Company manages each of its Systems on a
   decentralized basis, delegating direct responsibility for all hiring,
 marketing, distributions, customer service, churn control, billing,
     roaming and other day-to-day operating decisions to the general manager
of each System.                                                   

   General managers must strictly adhere to a budget designed to improve
  cash flow and reduce churn and their compensation is linked to their
      ability to meet or exceed their budgeted goals. The Company believes its
   decentralized management structure fosters a strong sense of customer
 service and community spirit, enables it to customize its marketing
      strategy to the needs of the local market, and eliminates the need for a
      large corporate staff or for a centralized multi-system customer service
      center that is located outside of the local market. The Company believes
     that placing decision-making responsibility in the hands of its general
 managers fosters the decisive actions necessary to meet competitive
challenges.                                                       

Aggressive Marketing and Promoting of Cellular Service.  After    
selectively upgrading the engineering in its cellular network, the
     Company implements aggressive marketing programs to increase subscriber
  activations and reduce churn. Many of these programs are designed to
    distinguish the Company as the local market's highest quality cellular
       service provider, stressing its localized sales offices, customer service
   and commitment to the community. These programs also include offering
   distinctive rate plans and roaming rates to emphasize "value" and the
"advantage" of the Company's cellular service, launching targeted 
advertising campaigns aimed at the most attractive cellular user  
       segments, creating regional marketing alliances with neighboring cellular
      carriers and taking an active, visible role in community, government and
       charity organizations. Management believes that the Company's positioning
       of its cellular system as the local service provider often contrasts with
      its larger competitors, which frequently centralize customer service and
other functions outside the local market.                         

    Strong Retail and Direct Sales Effort.  A key element of the Company's
      positioning in its markets is its use of local retail stores, as well as
    a local direct sales force. A retail location complemented by a direct
       sales force provides the Company with more control over the sales process
    than if it were to rely exclusively on independent agents. The Company
     has aggressively opened its own retail stores and currently operates in
     excess of 50 retail locations, up from only 13 as of December 31, 1994.
  Management believes that this local presence enhances its ability to
    provide higher quality customer service, and that on average customers
 who purchase cellular service directly from the Company through its
    retail stores and direct sales force tend to have fewer complaints and
   higher usage than subscribers who activate with independent agents or
independent retailers.                                            

     Dedication to Customer Service.  The Company strives to maintain a high
       level of customer satisfaction through a variety of techniques, including
     tying sales commissions to subscriber retention, outbound telemarketing
     to subscribers on a regular basis, maintaining 24-hour customer service
      and active ongoing contact with new customers. The Company believes that
its emphasis on superior                                          

39

424B1
40th Page of 94
TOC
1st
Previous
Next
Bottom
Just 40th

    customer service has helped reduce its average monthly churn rate. For
       example, in its IPO Systems the churn rate declined from 2.4% for the six
  months ended June 30, 1995 to 1.5% for the six months ended June 30,
1996.                                                             

 System Expansion to Increase Signal Coverage.  Where practical, the
    Company strives to "fill in" the "cellular geographic service area" or
 "CGSA" (as defined by the FCC) within its markets by adding network
      facilities to increase the coverage of its radio signal. Under the rules
and regulations of the FCC, expansion of the signal coverage will 
      preserve the Company's right to provide cellular service in all areas of
       its markets. After the initial build-out of the market fills in the CGSA,
   the Company monitors the signal coverage and selectively seeks to add
      cell sites to upgrade the capacity and reach of the cellular signal. The
    contribution by McCaw/AT&T Wireless of a substantial amount of capital
   equipment (including a digital supernode switch and approximately 100
cell sites) as part of its initial equity investment in 1994 has  
       significantly reduced the Company's capital expenditure requirements over
the last two years.                                               

40

424B1
41st Page of 94
TOC
1st
Previous
Next
Bottom
Just 41st

CELLULAR MARKETS AND SYSTEMS                                                    

    The Company has concentrated its efforts on creating an integrated network
of cellular systems in each of its three operating clusters. The table below    
summarizes certain information concerning the Company's markets after giving    
effect to the Pending Transactions. See "The Company -- Pending Transactions".  

                                                        · Enlarge/Download Table

                                                         TOTAL                                  DATE OF    
                      MARKET(A)                          POPS        OWNERSHIP  NET POPS      ACQUISITION  
-----------------------------------------------------  ---------     ---------  ---------     -----------  
                                                                                                           
UPPER MIDWEST CLUSTER                                                                                      
  Duluth, MN/Superior, WI MSA........................    241,467       100.0%     241,467       04/28/94   
  Eau Claire, WI MSA.................................    143,190        97.1%     139,610       04/28/94   
  Wausau, WI MSA.....................................    121,262        94.4%     114,483       03/28/95   
  MN-2A RSA..........................................     38,236       100.0%      38,236       07/07/95   
  MN-3 RSA...........................................     59,388       100.0%      59,388       04/28/94   
  MN-4 RSA...........................................     15,075        49.0%       7,387       07/27/95   
  MN-5 RSA...........................................    205,456       100.0%     205,456       07/07/95   
  MN-6 RSA...........................................    219,149       100.0%     219,149       11/23/94(b)
  WI-1 RSA...........................................    109,248       100.0%     109,248       04/28/94   
  WI-2 RSA...........................................     84,925(c)    100.0%      84,925(c)     pending(d)
  WI-3 RSA...........................................    139,189       100.0%     139,189       11/23/94(b)
  WI-6A RSA..........................................     32,734       100.0%      32,734       11/23/94(b)
  MI-1 RSA...........................................    208,779       100.0%     208,779       03/07/95   

                                                        · Enlarge/Download Table
                                                                                               
MID-ATLANTIC CLUSTER                                                                           
  OH-7 RSA...........................................   254,949  100.0%    254,949  09/27/95   
  OH-10A RSA.........................................    61,785  100.0%     61,785  09/29/95   
  PA-9 RSA...........................................   187,551  100.0%    187,551  02/02/96   
  WV-2 RSA...........................................    79,307  100.0%     79,307  12/20/95   
  WV-3 RSA...........................................   269,413  100.0%    269,413  07/23/96   
NEW YORK CLUSTER                                                                               
  Orange County, NY MSA..............................   324,323  100.0%    324,323   pending(d)
  Poughkeepsie, NY MSA...............................   262,663   94.8%    248,932  04/23/96(e)
  NY-5 RSA...........................................   383,960  100.0%    383,960  12/29/95   
  NY-6 RSA...........................................   111,023  100.0%    111,023  04/23/96   
SBC JOINT VENTURE                                                                              
  Laredo, TX MSA.....................................   168,924   44.5%     75,171  11/30/95(b)
  IL-4 RSA...........................................   216,023   44.5%     96,130  11/30/95(b)
  IL-6 RSA...........................................   199,453   44.5%     88,757  11/30/95(b)
OTHER INTERESTS                                                                                
  Florence, AL MSA...................................   136,816  100.0%    136,816  11/23/94(b)
  AL-1B RSA..........................................    62,035  100.0%     62,035  11/23/94(b)
  Kankakee, IL MSA...................................   102,541   20.0%     20,534  07/09/94   
  Alton/Granite City, IL MSA.........................    21,159   85.6%     18,112  07/07/95   
  Janesville, WI MSA.................................   147,650   12.2%     18,003   pending(d)
  Benton Harbor, MI MSA..............................   161,966   10.0%     16,157  07/09/94   
  Other Minority Interests...........................       n/a    n/a      17,997   pending(d)
                                                      ---------          ---------             
         Total....................................... 4,769,639          4,071,006             
                                                      =========          =========             

---------------                                                                 
(a) All of the Company's licenses are non-wireline licenses with the exception  
  of the licenses for the Laredo, TX MSA, the Florence, AL MSA and the AL-1B
RSA, which are wireline licenses.                                       

(b) Assumes the acquisition of the remaining shares of CIS. On November 23,     
    1994, the Company acquired approximately 90.8% (on a fully diluted basis) of
   the equity of CIS and approximately 92.1% (on a fully diluted basis) of the
    voting power entitled to vote generally in the election of directors of CIS.

(c) Includes the Pops in the WI-2 RSA where the Company has interim operating   
    authority pending the resolution of a dispute, to which the Company is not a
party, between two applicants for the non-wireline cellular license with
respect to the WI-2 RSA. The FCC has awarded the WI-2 RSA construction  
permit to both of the two applicants. The Company's interim operating   
authority expires upon                                                  

41

424B1
42nd Page of 94
TOC
1st
Previous
Next
Bottom
Just 42nd

the earlier of 30 days notice by the applicants or construction of the  
applicant's system unless the permit is sold to the Company. Until      
expiration occurs, the Company is entitled to all revenue and income    
  generated by the WI-2 RSA. Both of such applicants have indicated a desire
  to sell such permit to the Company subject to FCC approval, once the final
order is issued. The Company does not expect the purchase price to be   
material. There can be no assurance that the WI-2 Acquisition will be   
consummated.                                                            

(d) Represents systems to be acquired by the Company as described under "The    
   Company -- Pending Transactions". These acquisitions are not expected to be
consummated prior to the closing of this Offering. There can be no      
  assurances that the Company will be successful in consummating the Pending
Transactions.                                                           

(e) Includes the Pops associated with the acquisition by the Company of 83.1% of
the Poughkeepsie, NY MSA on April 23, 1996, the Pops associated with the
  pending acquisition by the Company of 11.1% of the Poughkeepsie, NY MSA as
part of the Orange County Exchange and certain other minority interests 
previously acquired by the Company.                                     

MARKETS                                                                         

Upper Midwest Cluster                                                       

     The Upper Midwest Cluster consists of approximately 1.6 million Net Pops in
13 contiguous Systems and covers more than 65,000 square miles. The Systems in  
the Upper Midwest Cluster all operate under the CELLULAR ONE(R) brand name.     

 The Duluth/Superior market is the second largest market in Minnesota in
terms of population, according to Donnelly Market Information Service, and the  
largest tourist destination in the upper Midwest, attracting more than 3.5      
million tourists annually. The Company collects substantial roaming revenues in 
this market from cellular telephone subscribers from other Systems who visit the
Duluth/Superior area. The market also includes two universities each with more  
than 10,000 students, the University of Minnesota at Duluth and the University  
of Wisconsin at Superior.                                                       

     The Eau Claire market is strategically located between Minneapolis/St. Paul
and other large midwest cities such as Milwaukee, Madison and Chicago. In 1994, 
Entrepreneur magazine named Eau Claire one of the 25 best cities in America for 
small businesses and ranked Eau Claire as the third best small city in America  
for small businesses.                                                           

    The largest cellular service area in the Upper Midwest Cluster in terms of
population, according to the Donnelley Market Information Service, is the MN-6  
market, a significant resort and tourist destination. The market covers more    
than 75 miles of I-35, the main interstate between Duluth and Minneapolis.      

     The MN-5 RSA, situated between Minneapolis/St. Paul and Fargo, ND, includes
more than 80 miles of I-94. It includes Becker County with over 300 lakes and   
the towns of Alexandria and Fergus Falls, MN. The MN-2 market, which consists of
Beltrami County, sits to the north of the MN-6 RSA and includes the resort      
destination of Bemidji, MN. MN-3's main population centers are International    
Falls and Grand Rapids, MN, which the Company believes have strong communities  
of interest with Duluth.                                                        

The WI-3 market includes important recreational and vacation areas in 
northeastern Wisconsin. Rhinelander, the RSA's largest city, serves as a        
regional economic and cultural hub. The Wausau, WI MSA comprises Marathon       
County.                                                                         

In addition, the Company's Upper Midwest Cluster includes the western 
portion of the upper peninsula of Michigan. The MI-1 RSA has more than 200,000  
Pops and is an important year-round vacation destination for many residents of  
Detroit and other midwest cities.                                               

   The Systems in the Upper Midwest Cluster compete against various wireline
cellular service providers marketing under six different names. Management      
believes that the diversity of competitors operating under various names and the
Company's use of the CELLULAR ONE(R) brand name affords the Company marketing,  
advertising and other operational advantages relative to those competitors.     
These advantages include advertising and marketing the Company's services as a  
single brand name on a regional basis, allowing the Company to set regional     
roaming rates, being a single cellular service provider to corporate accounts,  
allowing calls to be handed-off between cell sites that cross market borders and
reducing the number of dropped calls as subscribers exit an individual license  
area. The Company acquired the Systems constituting the Upper Midwest Cluster in
seven separate transactions from April 1994 to August 1995. See "The            
Company -- Recent Acquisitions".                                                

42

424B1
43rd Page of 94
TOC
1st
Previous
Next
Bottom
Just 43rd

The Mid-Atlantic Cluster                                                    

The Mid-Atlantic Cluster comprises approximately 853,000 Net Pops and 
includes portions of southeastern Ohio as well as adjacent portions of          
Pennsylvania and northern West Virginia south of Pittsburgh. This contiguous    
region spans five RSAs. Prior to the Company's acquisition of the Mid-Atlantic  
Cluster, the Systems constituting the Mid-Atlantic Cluster were owned by three  
distinct companies and operated as separate markets with separate switching     
equipment. Management believes that the operations of these contiguous Systems  
as a cluster will generate significant operational and marketing synergies. In  
addition, the Mid-Atlantic Cluster abuts Columbus, OH and three MSAs owned by   
McCaw/AT&T Wireless including its Pittsburgh, PA System, affording the          
opportunity for joint marketing and promotions.                                 

   The OH-7 RSA is an important RSA east of Columbus, OH and abuts four MSAs
including Canton, OH, the Parkersburg, WV/Marietta, OH MSA and two McCaw/AT&T   
Wireless MSAs. The OH-7 RSA's principal population center is the city of        
Zanesville, OH, which serves as a manufacturing, retail and medical center for  
much of southeastern Ohio. The RSA includes over 60 miles of I-70 between       
Columbus, OH and Pittsburgh, PA and over 75 miles of I-77 south of Cleveland,   
OH.                                                                             

     The WV-3 RSA (269,413 Pops) is situated between the Company's PA-9 and WV-2
RSAs. This RSA includes the cities of Morgantown and Clarksburg, West Virginia  
and is part of the Pittsburgh, PA MSA. The Monongalia region of nearly 100,000  
Pops, centered in Morgantown, has experienced increased economic growth in      
recent years, with strong growth coming from West Virginia University as well as
the relocation of the FBI's main fingerprinting facility to the RSA. The region 
is a medical hub for adjacent counties, due in part to recent expansions of the 
Robert C. Byrd Health Sciences Center. The region includes significant tourist  
attractions such as white water rafting and other recreational activities. Major
highways I-79 and I-68 intersect in Morgantown and I-79 serves as the main route
south from Pittsburgh. The Mid-Atlantic Cluster also includes Uniontown, PA, a  
residential community of Pittsburgh, PA.                                        

The New York Cluster                                                        

  The Company's New York Cluster consists of approximately 1.1 million Net
Pops and over 8,000 square miles in suburban New York. The New York Cluster is  
adjacent to McCaw/AT&T Wireless' New York City MSA and is located between the   
New York City MSA and SBC's Albany, NY MSA. The acquisition of the Orange       
County, NY MSA (324,323 Pops) in the New York Cluster is pending. See "The      
Company -- Pending Transactions". With the addition of the Orange County, NY    
MSA, the Company's New York Cluster includes the entire Hudson Valley/Catskill  
region, thereby creating significant marketing and promotional synergies and    
opportunities.                                                                  

  The Orange County, NY MSA is directly north of the New York City MSA and
abuts Westchester, Putnam and Rockland counties. Serving as a residential       
community of metropolitan New York, Orange County includes the cities of        
Newburgh, Middletown, Port Jervis and the affluent towns of Tuxedo and Warwick. 
Major tourist destinations include The United States Military Academy at West   
Point, Storm King State Park and Sterling Forest. The MSA contains more than 40 
miles of the New York Thruway (I-87), approximately 50 miles of I-84 and 35     
miles of Route 17.                                                              

    The Dutchess County, NY MSA includes the towns of Poughkeepsie, Hyde Park,
Rhinebeck and Fishkill, NY and is one of the wealthiest metropolitan areas in   
the country. It contains over 80 highway miles, including 18 miles of I-84 and  
40 miles of the Taconic State Parkway and is the home of Vassar College. The    
Hudson Valley area has become an attractive location for small high technology  
ventures, due, in part, to aggressive government and community support.         

     The NY-5 RSA consists of the central New York counties of Sullivan, Ulster,
Ostego, Delaware and Schohaire. The 383,960 Pop RSA abuts six other New York    
MSAs including the Albany, Binghamton and Orange County MSAs. The southern      
portion of the RSA consists of the Catskills Region, renowned for summer resorts
(such as the Concord) and vacation homes. The RSA includes the Baseball Hall of 
Fame in Cooperstown; the Soccer Hall of Fame in Oneonta, NY; Woodstock, NY;     
Monticello Raceway and many                                                     

43

424B1
44th Page of 94
TOC
1st
Previous
Next
Bottom
Just 44th

other notable destinations in the Hudson River Valley. Much of the northeast    
portion of the RSA serves as a residential community of the Albany/Schenectady, 
NY area.                                                                        

   The NY-5 RSA market is the eighth largest RSA (out of 415) and ranks 29th
in terms of household incomes greater than $50,000. It contains 112 miles of    
interstate highways, including portions of I-87 between New York City and       
Albany, portions of I-88 between Albany and Binghamton and approximately 90     
miles of Route 17. In addition, the RSA contains two bridge crossings of the    
Hudson River, each used by more than four million vehicles per year.            

   The NY-6 RSA comprises Greene and Columbia counties and contains numerous
recreational and transit destinations such as the Hunter Mountain ski resort    
area and Ski Windham. The market also contains 30 miles of the New York State   
Thruway and other highway corridors.                                            

Florence, AL MSA                                                                

 The Florence, Alabama market and the adjoining AL-1B RSA constitute the
Florence/Muscle Shoals region of northwest Alabama. The Company's wireline      
System operates as "Shoals Cellular" and is a member of MobiLink. The Muscle    
Shoals area serves as the home of the Tennessee Valley Authority's ("TVA")      
Environmental Research Center and as a major branch office of the TVA. Most of  
the wireline Systems abutting the Florence, AL/AL-1B market are owned and       
operated by BellSouth.                                                          

THE SBC JOINT VENTURE                                                           

 The Company owns 44.5% of a joint venture with SBC in which the Company
contributed its System serving the Laredo, TX MSA and SBC contributed its       
Systems serving the IL-4 RSA and IL-6 RSA (the "SBC Joint Venture"). The Company
owns 44.5% of the Systems serving the combined 584,400 Pops, or 260,058 Net     
Pops. The SBC Joint Venture was consummated on November 30, 1995.               

   Pursuant to the SBC Joint Venture, the Company will receive distributions
in the first four years of the SBC Joint Venture increasing from $3.3 million in
the first year to $5.8 million in the last year. The Company will have the      
option to remain in the SBC Joint Venture for four years or "put" its Joint     
Venture interest in the SBC Joint Venture to SBC at any time during the four    
year period at a price beginning at $28.5 million and increasing to             
approximately $39 million at the end of the four year period. SBC will have the 
right to purchase the Company's interest during the first year at approximately 
$56 million or on the day prior to SBC Joint Venture's fourth anniversary at 5% 
above the then "put" price. SBC has operating control of these properties during
the term of the SBC Joint Venture.                                              

CELLULAR OPERATIONS                                                             

General                                                                     

   The Company has concentrated its recent efforts on creating an integrated
network of Systems in its operating clusters. The Company operates three        
clusters of Systems as well as Systems in certain other markets and holds       
minority interests in several Systems. As of June 30, 1996 on an actual basis,  
the Company had approximately 118,000 subscribers. Through the participation of 
its non-wireline Systems in NACN (as described below) and other special         
networking arrangements between the Company and other non-wireline operators of 
cellular systems in the United States, management believes the Company's        
subscribers are able to receive quality coverage throughout the United States.  

The following table sets forth certain information with respect to the
performance of the Company's Systems for the periods indicated. The pro forma   
results give effect to the Pending Transactions and other transactions described
under "Unaudited Pro Forma Condensed Consolidated Financial Data". Accordingly, 
the pro forma results set forth below principally relate to periods during which
the Company did not own or                                                      

44

424B1
45th Page of 94
TOC
1st
Previous
Next
Bottom
Just 45th

operate certain of such Systems and therefore the Company does not believe they 
are necessarily indicative of the performance of these Systems under the        
Company's management.                                                           

                                                        · Enlarge/Download Table

                                           SIX MONTHS ENDED        YEARS ENDED DECEMBER 31,     
                                            JUNE 30, 1996       ------------------------------- 
                                         --------------------   PRO FORMA    ACTUAL     ACTUAL  
                                         PRO FORMA    ACTUAL      1995        1995       1994   
                                         ---------   --------   ---------    -------    ------- 
                                                                                                
Ending subscribers(1)...................   112,458    118,033      87,059     78,227     17,344 
Ending penetration(2)...................       2.8%       2.9%        2.2%       2.2%       1.0%
Average marketing costs per net                                                                 
   subscriber addition(3)............... $     426   $    372   $     495    $   403    $   n/a 
Average monthly revenue per                                                                     
   subscriber(4)........................        80         82          85        107        n/a 
Churn(5)................................       1.8%       1.6%        2.1%       2.3%       n/a 

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

    (1) Each billable telephone number in service represents one subscriber, not
  including test, demonstration or other telephone numbers for which
payment is not expected.                                        

(2) Represents the ratio of ending subscribers to the estimated total   
population of majority owned Systems.                           

   (3) Determined by dividing the amount of marketing costs for such period by
       the net subscribers added during such period. Marketing cost represents
all selling expenses and losses incurred on equipment sales.    

(4) Represents the ratio of total service revenues to average monthly   
subscribers.                                                    

 (5) Represents the average monthly churn for the periods presented. Churn
       equals the ratio of disconnected monthly subscribers to average monthly
subscribers.                                                    

    Management believes that each of its Systems and certain of the Systems to
be acquired pursuant to the Pending Acquisitions are in the early stages of     
their growth cycle and afford significant opportunities for improvements in     
performance, particularly with respect to rates of penetration and churn.       
Management believes that, prior to the Company's assumption of ownership, each  
System had been significantly undermanaged or underdeveloped. Some of the       
Systems had minimal signal coverage, had never been actively marketed and had   
never developed a subscriber base. Certain other markets had adequate signal    
coverage but the sales and marketing activity had largely been dormant. There   
can be no assurances, however, that the Company will be able to maintain such   
improvements or achieve similar improvements with respect to its other Systems. 

  In the IPO Systems, the Company has significantly increased subscribers,
penetration, revenues and operating cash flow since it assumed ownership. For   
example, the Company's penetration in the IPO Systems rose to 2.9% at June 30,  
1996 up from 1.4% at June 30, 1995 and average monthly churn fell to 1.5% in the
six months ended June 30, 1996 from 2.4% in the corresponding period in the     
prior year.                                                                     

    The Company has formed a strategic alliance with McCaw/AT&T Wireless which
allows it to take advantage of McCaw/AT&T Wireless' acquisition experience,     
certain vendor discounts and certain services provided by McCaw/AT&T Wireless   
including a variety of centralized "back office" functions. PriCellular believes
that the proximity of each of its operating clusters to McCaw/AT&T Wireless'    
Systems affords significant opportunities for joint marketing, promotions and   
other programs. The Company's Upper Midwest Cluster is contiguous to McCaw/AT&T 
Wireless' Systems serving the Minneapolis/St. Paul, MN MSA and the St. Cloud, MN
MSA. The Company's Mid-Atlantic Cluster borders the Pittsburgh, PA,             
Steubenville, OH MSA and Wheeling, WV MSAs owned by McCaw/AT&T Wireless. The    
Company's New York Cluster abuts the northern border of McCaw/AT&T Wireless' New
York City MSA including Westchester and Rockland counties. The New York Cluster 
is also adjacent to three MSAs owned by SBC (with whom the Company has a joint  
venture in Illinois and Texas).                                                 

Subscribers and System Usage                                                

     The Company's cellular subscribers have increased from approximately 17,000
as of December 31, 1994 to, on a pro forma basis, to approximately 112,000 as of
June 30, 1996. The Company's subscribers fall into 12 major categories:         
construction, professional/management, medical, sales, real estate, agriculture,
service industry, transportation, financial, government, manufacturing and      
other, which includes low usage subscribers. Reductions in the cost of cellular 
services have led to an increase in cellular telephone usage by general         

45

424B1
46th Page of 94
TOC
1st
Previous
Next
Bottom
Just 46th

consumers for nonbusiness purposes. In addition, the Company believes that      
several categories of its subscribers will develop requirements for specialized 
cellular applications, such as wireless data technology. As a result, the       
Company believes that there is an opportunity for significant growth in each of 
its existing service areas. The Company will continue to seek to broaden its    
subscriber base for basic cellular services as well as to increase its offering 
of customized services. The sale of custom calling features typically results in
increased usage of cellular telephones by subscribers, thereby further enhancing
revenues.                                                                       

Marketing                                                                   

   The Company markets all of its cellular products and services (other than
Florence, AL and AL-1B) under the name CELLULAR ONE(R), one of the most         
recognized brand names in the cellular industry. See "-- Service Marks". The    
national advertising campaign conducted by the Cellular One Group enhances the  
Company's advertising exposure at a fraction of the cost of what could be       
achieved by the Company alone. The Company also obtains substantial marketing   
benefits from the name recognition associated with this widely used service     
mark, both with existing subscribers traveling outside the Company's service    
areas and with potential new subscribers moving into the Company's service      
areas. In addition, travelers who subscribe to CELLULAR ONE(R) service in other 
markets may be more likely to use the Company's service when they travel in the 
Company's service areas, primarily due to the technical operation of the        
cellular telephone. Cellular telephones of non-wireline subscribers are         
programmed to select the non-wireline carrier (such as the Company) when        
roaming, unless the non-wireline carrier in the roaming area is not yet         
operational or the subscriber either dials a special code or has a cellular     
telephone equipped with an "A/B" (non-wireline/wireline) switch and selects the 
wireline carrier.                                                               

   Through its membership in NACN and other special networking arrangements,
the Company provides extended regional and national service to subscribers in   
its markets, thereby allowing them to make and receive calls while in other     
cellular service areas without dialing special access codes. This service       
distinguishes the Company's service and call delivery features from those of    
some of its competitors. NACN is the largest wireless telephone network system  
in the world, linking non-wireline cellular operators throughout the United     
States and Canada. NACN connects key areas across North America so that         
customers can use their cellular phones to place and receive calls in these     
areas as easily as they do in their home areas. Through NACN, customers receive 
calls automatically without the use of complicated roaming codes as they roam in
more than 4,500 cities, or approximately 90% of the cities in the United States 
and Canada. By dialing subscribers' cellular telephone numbers, the caller can  
reach subscribers without knowing their location or having to dial additional   
roaming access numbers. In addition, special services such as call forwarding   
and call waiting automatically follow the subscribers as they travel.           

The Company's marketing strategy is designed to generate continued net
subscriber growth by focusing on subscribers who are likely to generate higher  
than average monthly revenues and lower than average churn rates, while         
simultaneously maintaining a relatively low cost of adding net subscribers. The 
Company principally uses in-house sales and marketing staff and its own retail  
outlets.                                                                        

Management has implemented its marketing strategy by training and     
compensating its sales force in a manner designed to stress the importance of   
customer service, high penetration levels and minimum acquisition costs per     
subscriber. The Company believes that its internal sales force is better able to
select and screen new subscribers and select pricing plans that realistically   
match subscriber means and needs than are independent agents. In addition, the  
Company motivates its direct sales force to sell appropriate rate plans to      
subscribers, thereby reducing churn, by linking payment of commissions to       
subscriber retention. As a result, the Company's use of an internal sales force 
keeps marketing costs low both directly, because commissions are lower, and     
indirectly, because subscriber retention is higher than when independent agents 
are used.                                                                       

The Company believes that it helps minimize its churn rate through an 
after-sale telemarketing program implemented through its sales force and        
customer service personnel. This program not only enhances customer loyalty,    
which reduces churn, but also increases add-on sales and customer referrals. The
telemarketing program allows the sales staff to check customer satisfaction as  
well as to offer additional calling features, such as voicemail, call waiting   
and call forwarding.                                                            

     The Company's sales force works principally out of its own retail stores in
which the Company offers a full line of cellular products and services. As of   
June 30, 1996, the Company maintained approximately 50                          

46

424B1
47th Page of 94
TOC
1st
Previous
Next
Bottom
Just 47th

retail stores. Ranging from 250 square feet to 2,100 square feet, each store is 
fully equipped to handle customer service and telephone maintenance and         
installation. Some of these stores are also authorized warranty repair centers. 
The Company's stores provide subscriber-friendly retail environments (extended  
hours, large selection, an expert sales staff and convenient locations) which   
make the sales process quick and easy for the subscriber.                       

Products and Services                                                       

     In addition to providing high-quality cellular telephone service in each of
its markets, the Company also offers various custom-calling features such as    
voicemail, call forwarding, call waiting, three-way conference calling and no   
answer transfer. The Company also sells cellular equipment at discount prices as
a way to encourage use of its mobile services. The Company continually reviews  
its equipment and service pricing in order to maintain its competitive position.

    Several rate plans are presented to prospective customers so that they may
choose the plan that will best fit their expected calling needs. Unlike some of 
its competitors, the Company designs rate plans on a market-by-market basis. The
Company's local general managers generally have the authority to modify existing
rate plans and initiate new rate plans depending upon market and competitive    
conditions. Generally, these rate plans include a high-volume user plan, a      
medium-volume user plan, a basic plan and an economy plan. Most rate plans      
combine a fixed monthly access fee, per-minute usage charges and additional     
charges for custom-calling features in a package which offers value to the      
customer while enhancing airtime use and revenues for the Company. In general,  
rate plans which include a higher monthly access fee typically include a lower  
usage rate per minute. An ongoing review of equipment and servicing pricing is  
maintained to ensure the Company's competitiveness. As appropriate, revisions to
pricing of service plans and equipment are made to meet the demands of the local
marketplace.                                                                    

  Reciprocal agreements between each of the Company's cellular systems and
the cellular systems of other operators allow their respective subscribers to   
place calls in most cellular service areas throughout the country. Roamers are  
charged usage fees which are generally higher than a given cellular system's    
regular usage fees, thereby resulting in a higher profit margin on roaming      
revenue. Roaming revenue is a substantial source of incremental revenue for the 
Company due in part to the fact that a number of the Company's cellular systems 
are located along major travel corridors and because certain of the Company's   
Systems are in the early stages of their growth cycle.                          

     In an effort to provide comprehensive availability of mobile communications
services to its customers throughout North America, the Company has entered into
a distribution agreement with American Mobile Satellite Corporation ("AMSC").   
AMSC is licensed by the FCC to provide mobile satellite communication services  
which will complement the existing terrestrial cellular system providing mobile 
voice, fax and data communications in all areas not covered by cellular service.
Subscribers will gain access to AMSC's satellite through a cellular/satellite   
mobile phone which will route calls through the cellular network in those areas 
covered by cellular service and will process the call via satellite in the      
absence of cellular coverage. AMSC anticipates that it will provide commercial  
service by the end of 1996.                                                     

Customer Service                                                            

 Customer service is an essential element of the Company's marketing and
operating philosophy. The Company is committed to attracting new subscribers and
retaining existing subscribers by providing consistently high-quality customer  
service. In each of its cellular service areas, the Company maintains           
installation and repair facilities and a local staff, including a market        
manager, customer service representatives, technical and engineering staff and  
sales representatives. Each cellular service area handles its own               
customer-related functions such as credit evaluation, customer activations,     
account adjustments and rate plan changes. Local offices and installation and   
repair facilities enable the Company to service customers better, schedule      
installations and make repairs. Through the use of sophisticated monitoring     
equipment, technicians at the customer service center are able to monitor the   
technical performance of its cellular service areas.                            

    In addition, the Company's customers generally are able to report cellular
telephone service or account problems 24-hours a day to a local office          
representative. Management believes its decentralized philosophy                

47

424B1
48th Page of 94
TOC
1st
Previous
Next
Bottom
Just 48th

and emphasis on customer service in each of its markets affords it a competitive
advantage over its large competitors who typically centralize customer service  
outside of the local market.                                                    

System Development and Expansion                                            

 The Company develops or builds out its cellular service areas by adding
channels to existing cell sites and by building new cell sites. Such development
is designed to increase capacity and to improve coverage in direct response to  
projected subscriber demand. Projected subscriber demand is calculated for each 
cellular service area on a cell-by-cell basis. These projections involve a      
traffic analysis of usage by existing subscribers and an estimation of the      
number of additional subscribers in each such area. In calculating projected    
subscriber demand, the Company builds into its design assumptions a maximum call
"blockage" rate of 2% (percentage of calls that are not connected on first      
attempt at peak usage time during the day). After calculating projected         
subscriber demand, the Company determines the most cost-efficient manner of     
meeting such projected demand. The Company has historically met such demand     
through a combination of augmenting channel capacity in existing cell sites and 
building new cell sites.                                                        

  Cell site expansion is expected to enable the Company to continue to add
subscribers, enhance use of the Systems by existing subscribers, increase roamer
traffic due to the larger geographic area covered by the cellular network and   
further enhance the overall efficiency of the network. The Company believes that
the increased cellular coverage will have a positive impact on market           
penetration and subscriber usage. Management believes that its future capital   
expenditure requirements are reduced by the availability of certain capital     
equipment contributed by McCaw/AT&T Wireless as part of its investment in the   
Company. McCaw/AT&T Wireless contributed much of the capital equipment which had
been running McCaw/AT&T Wireless' Minneapolis/St. Paul, MN MSA including a      
digital-ready central switching system and approximately 100 cell sites.        

  The Company also continues to evaluate expansion through acquisitions of
other cellular properties that will further enhance its network. In evaluating  
acquisition targets, the Company considers, among other things, demographic     
factors, including population size and density, traffic patterns, cell site     
coverage and required capital expenditures.                                     

Digital Cellular Technology                                                 

Over the next decade, it is expected that many cellular systems will  
convert from analog to digital technology. This conversion is due in part to    
capacity constraints in many of the largest cellular markets, such as New York, 
Los Angeles and Chicago. As carriers reach limited capacity levels, certain     
calls may be unable to be completed, especially during peak hours. Digital      
technology increases system capacity and offers other advantages, often         
including improved overall average signal quality, improved call security,      
potentially lower incremental costs for additional subscribers and the ability  
to provide data transmission services. The conversion from analog to digital    
technology is expected to be an industry-wide process that will take a number of
years to complete. The exact timing and overall costs of such conversion are not
yet known. Management does not believe that its network will experience capacity
constraints in the foreseeable future that would require converting its network 
from analog to digital technology.                                              

COMPETITORS AND ADJOINING SYSTEMS                                               

The Company competes with various competitors in each of its clusters.
Management believes that its integrated network of contiguous cellular systems  
operating as CELLULAR ONE(R) (except in Florence, Alabama and AL-1B) affords it 
significant advantages over many of its competitors. In the Upper Midwest       
Cluster, the Company competes against six distinct operators, and in the        
Mid-Atlantic Cluster, the Company competes against four distinct operators.     

48

424B1
49th Page of 94
TOC
1st
Previous
Next
Bottom
Just 49th

     The following chart lists the Company's cellular competitors in each of its
main clusters and the major adjoining operators.                                

                                                                · Download Table

   COMPANY CLUSTER           CELLULAR COMPETITORS          ADJOINING SYSTEMS   
----------------------  ------------------------------  -----------------------
                                                                               
Upper Midwest Cluster   US West Cellular                McCaw/AT&T Wireless    
                        United States Cellular Corp.    BellSouth              
                        CelluLink                       Western Wireless       
                        Cellular 2000                                          
                        CellCom                                                
                        Century Telephone Enterprises                          
Mid-Atlantic Cluster    United States Cellular Corp.    McCaw/AT&T Wireless    
                        Wireless One Network            Airtouch/Cellular      
                        Ameritech                       Communications, Inc.   
                        Bell Atlantic NYNEX             Vanguard               
New York Cluster        Bell Atlantic NYNEX             McCaw/AT&T Wireless    
                                                        SBC Corporation        
                                                        Vanguard               

SERVICE MARKS                                                                   

CELLULAR ONE(R) is a registered service mark with the U.S. Patent and 
Trademark Office. The service mark is owned by Cellular One Group, a Delaware   
general partnership of Cellular One Marketing, Inc., a subsidiary of            
Southwestern Bell Mobile Systems, Inc., together with Cellular One Development, 
Inc., a subsidiary of McCaw/AT&T Wireless and Vanguard Cellular Systems, Inc.   
The Company uses the CELLULAR ONE(R) service mark to identify and promote its   
cellular telephone service pursuant to licensing agreements with Cellular One   
Group (the "Licensor"). Licensing and advertising fees are determined based upon
the population of the licensed areas. The licensing agreements require the      
Company to provide high-quality cellular telephone service to its customers and 
to maintain a certain minimum overall customer satisfaction rating in surveys   
commissioned by the Licensor. The licensing agreements which the Company has    
entered into are for original five-year terms expiring on various dates. These  
agreements may be renewed at the Company's option for three additional five-year
terms.                                                                          

EMPLOYEES AND AGENTS                                                            

As of June 30, 1996, the Company had approximately 450 employees. In  
addition, as of such date, the Company had agreements with numerous independent 
sales agents, including car dealerships, electronics stores, paging services    
companies and independent contractors. None of the Company's employees are      
represented by a labor organization, and the Company's management considers its 
employee relations to be good.                                                  

49

424B1
50th Page of 94
TOC
1st
Previous
Next
Bottom
Just 50th

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS                                                

The following table sets forth certain information with respect to    
directors and executive officers of the Company.                                

                                                        · Enlarge/Download Table

               NAME                  AGE                      OFFICE                   
-----------------------------------  ----  --------------------------------------------
                                                                                       
Robert Price.......................   63   Director, President and Assistant Treasurer 
Stuart B. Rosenstein...............   35   Vice President, Chief Financial Officer,    
                                           Treasurer and Assistant Secretary           
Kim I. Pressman....................   39   Director, Vice President, Assistant         
                                           Treasurer and Secretary                     
Steven Price.......................   34   Vice President, Corporate Development       
Brion B. Applegate.................   42   Director                                    
Tim R. Palmer......................   38   Director                                    
Scott M. Sperling..................   38   Director                                    

    ROBERT PRICE has been a Director, President and Assistant Treasurer of the
Company since 1990. Mr. Price concurrently serves as and has been a director and
the Chief Executive Officer and President of Price Communications since 1979. In
1992 Price Communications filed for protection from creditors pursuant to       
Chapter 11 of the United States Bankruptcy Code. Price Communications' Amended  
Plan of Reorganization was confirmed on June 11, 1992 and became effective on   
December 30, 1992. Mr. Price, an attorney, is a former General Partner of Lazard
Freres & Co. He has served as an Assistant United States Attorney, practiced law
in New York and served as Deputy Mayor of New York City. After leaving public   
office, Mr. Price became Executive Vice President of The Dreyfus Corporation and
an Investment Officer of The Dreyfus Fund. In 1972 he joined Lazard Freres & Co.
Mr. Price has served as a Director of Holly Sugar Corporation, Atlantic States  
Industries, The Dreyfus Corporation, Graphic Scanning Corp. and Lane Bryant     
Inc., and is currently a member of The Council on Foreign Relations. Mr. Price  
serves as the Representative of The Majority Leader and President Pro Tem of the
New York Senate on the Board of Directors of the Municipal Assistance           
Corporation for the City of New York. In May, 1996 Mr. Price was appointed by   
Governor George Pataki of New York, and unanimously approved by the New York    
State Senate in June 1996, to a seven year term as a Member of the Board of     
Trustees of the City University of New York. Mr. Price is also a Director and   
President of TLM Corporation. Mr. Price was elected to the Company's Board of   
Directors as a nominee of the Price family pursuant to the Stockholders         
Agreement.                                                                      

   STUART B. ROSENSTEIN has been Vice President, Chief Financial Officer and
Assistant Secretary of the Company since December 1993. Mr. Rosenstein has also 
served as Treasurer of the Company since December 1994. From 1990 to December   
1993, he was the Company's Vice President and Controller. Prior to that time,   
Mr. Rosenstein, a certified public accountant, was a senior manager with the    
accounting firm of Ernst & Young. Mr. Rosenstein has a B.S. degree from SUNY at 
Buffalo, where he graduated magna cum laude.                                    

  KIM I. PRESSMAN has been a Director, Vice President and Secretary of the
Company since 1990. Ms. Pressman also served as the Treasurer of the Company    
from 1990 until December 1994. Ms. Pressman is a certified public accountant and
is a graduate of Indiana University and holds an M.B.A. from New York           
University. Since 1990, she has served as Senior Vice President of Price        
Communications and is currently also a Director. Prior to joining Price         
Communications in 1984, Ms. Pressman was employed for three years by Peat,      
Marwick, Mitchell & Co., a national certified public accounting firm, and for   
more than three years thereafter was Supervisor, Accounting Policies for        
International Paper Company and then Manager, Accounting Operations for         
Corinthian Broadcasting Division of Dun & Bradstreet Company, a large group     
owner of broadcasting stations. Ms. Pressman is the Chairman and a Vice         
President, Treasurer and Secretary of TLM Corporation. Ms. Pressman was elected 
to the Company's Board of Directors as a nominee of the Price family pursuant to
the Stockholders Agreement.                                                     

STEVEN PRICE has been a Vice President, Corporate Development of the  
Company since December 1994 and prior thereto was Director of Business          
Development of the Company since April 1993. From 1990 to 1993,                 

50

424B1
51st Page of 94
TOC
1st
Previous
Next
Bottom
Just 51st

Mr. Price was an attorney with Davis Polk & Wardwell. Prior thereto, Mr. Price  
was appointed by President Bush to serve in the U.S. State Department as Special
Assistant to the Chief U.S. Nuclear Arms Negotiator and worked in the mergers   
and acquisitions department of Goldman, Sachs & Co. Mr. Price graduated magna   
cum laude from Brown University, where he was elected to Phi Beta Kappa, and has
a J.D. degree from Columbia University. Mr. Price is a member of the Board of   
Directors of the Cellular Telecommunications Industry Association (CTIA). Steven
Price is a director of Price Communications and is the son of Robert Price.     

   BRION B. APPLEGATE has been a Director of the Company since June 1994. He
is a founder and general partner of Spectrum, a venture capital fund            
specializing in communications and telecommunications investments. Prior        
thereto, he was a general partner of funds managed by Burr, Egan, Deleage & Co. 
Mr. Applegate serves on the board of several private communications entities.   
Mr. Applegate originally was elected to the Company's Board of Directors as     
Spectrum's nominee pursuant to the Stockholders Agreement. The right of Spectrum
to nominate a director and a member of the Executive Committee has subsequently 
terminated.                                                                     

   TIM R. PALMER has been a Director of the Company since June 1994. He is a
Managing Director of Harvard Private Capital Group, Inc., which manages the     
private equities and real estate portfolios of the Harvard University endowment 
fund. Prior to joining Harvard Private Capital in 1990, Mr. Palmer was Manager, 
Business Development for The Field Corporation, a Chicago-based investment      
management firm specializing in direct investments in the communications        
industry, and an attorney with Sidley & Austin in Chicago. Mr. Palmer is a      
director of NHP Incorporated. Mr. Palmer was elected to the Company's Board of  
Directors as Harvard Private Capital's nominee pursuant to the Stockholders     
Agreement.                                                                      

   SCOTT M. SPERLING has been a director of the Company since February 1996.
Mr. Sperling is a Managing Director of the Thomas H. Lee Company and a General  
Partner of its affiliated Equity Funds. Prior to this position, he served for   
ten years as a Managing Director of Harvard Private Capital Group, Inc. From    
1981-1984, Mr. Sperling was a Senior Consultant with the Boston Consulting      
Group, Inc. He holds an M.B.A. from Harvard Business School and a B.S. from     
Purdue University. He is a Director of Beacon Properties, Inc., Softkey         
International, KAI Inc., Livent, Inc. and several private companies. Mr.        
Sperling is also a member of the corporation for the Brigham and Womens Hospital
and Medical Center and is the director of several charitable organizations.     

  The Board of Directors of the Company has established an Audit Committee
and a Compensation and Stock Option Committee. Ms. Pressman and Mr. Palmer serve
on the Audit Committee. Messrs. Applegate and Palmer serve on the Compensation  
and Stock Option Committee. The Audit Committee recommends the annual engagement
of auditors, with whom the Audit Committee will review the scope of audit and   
non-audit assignments, related fees, the accounting principles used in financial
reporting, internal financial auditing procedures and the adequacy of internal  
control procedures. The Company anticipates that additional directors will be   
appointed to the Audit Committee as needed to ensure that a majority of the     
Audit Committee members are independent directors. The Compensation and Stock   
Option Committee reviews and approves the remuneration arrangements for the     
officers and directors of the Company and reviews and recommends new executive  
compensation or stock plans in which the officers and/or directors are eligible 
to participate, including the granting of stock options.                        

  The by-laws of the Company provide for the establishment of an Executive
Committee, which the Board of Directors has established. The by-laws provide    
that the Executive Committee shall consist of four members, one of which shall  
be designated by each of the Price family, McCaw/AT&T Wireless, Harvard Private 
Capital and THL Equity Fund except during any period in which there is a        
significant overlap between the PCS licensed areas directly or indirectly owned,
operated or controlled by, or attributed to McCaw/AT&T Wireless, AT&T or any    
affiliate of either and the cellular geographic service areas directly or       
indirectly owned, operated or controlled by, or attributed to, the Company or   
any affiliate thereof, in which case it shall consist of three members one of   
which shall be designated by each of the Price family, Harvard Private Capital  
and THL Equity Fund.                                                            

51

424B1
52nd Page of 94
TOC
1st
Previous
Next
Bottom
Just 52nd

The affirmative vote of the Executive Committee of the Company with no
members voting against will be required to designate any class or series of     
Preferred Stock or incur any indebtedness other than trade indebtedness incurred
in the ordinary course of the Company's business and other than indebtedness not
in excess of $1,000,000. The right of Harvard Private Capital, McCaw/AT&T       
Wireless and the THL Equity Fund to nominate a member to the Executive Committee
shall terminate (a) with respect to Harvard Private Capital at such time as the 
number of fully diluted shares held by Harvard Private Capital is less than     
3,500,000 (subject to appropriate adjustment for subdivision, combination,      
consolidation or reclassification of such shares into a greater or lesser number
of shares) fully diluted shares then outstanding, (b) with respect to McCaw/AT&T
Wireless on the earlier to occur of (i) April 28, 2001 or (ii) such time as the 
number of fully diluted shares held by McCaw/AT&T Wireless is less than 7% of   
the total number of fully diluted shares then outstanding and (c) with respect  
to THL Equity Fund at such time as the number of fully diluted shares held by   
THL Equity Fund and certain other purchasers of shares of Series A Cumulative   
Convertible Preferred Stock, par value $.01 per share, of the Company is less   
than 3,500,000 (without giving effect to certain reductions to the conversion   
value provided in the certificate of designation to such shares and subject to  
appropriate adjustment for subdivision, combination, consolidation or           
reclassification of such shares into a greater or lesser number of shares). The 
members of the Executive Committee are Messrs. Price, Palmer and Sperling. The  
right of Spectrum to nominate a director and a member of the Executive Committee
has terminated. The right of Harvard Private Capital to nominate a director and 
a member of the Executive Committee shall terminate upon the consummation of    
this Offering.                                                                  

  The Company's directors will serve until their respective successors are
elected or until death, resignation or removal. Officers are appointed by, and  
serve at the pleasure of, the Board of Directors.                               

OTHER KEY EMPLOYEES                                                             

                                                        · Enlarge/Download Table

               NAME                  AGE                          OFFICE                       
-----------------------------------  ----  ----------------------------------------------------
                                                                                               
D. Michael Key.....................    47  Director of Engineering                             
Randall S. Mattson.................    36  Regional Operations Manager -- Upper Midwest        
Donald L. Anderson.................    52  Regional Operations Manager -- Mid-Atlantic Cluster 
Mark Dilcom........................    33  Director of Market Development                      
Pamela Fontana.....................    30  Director of Corporate Development                   
Joseph A. Banaszek.................    34  General Manager -- Wausau, WI MSA; WI-3 RSA         
Albert Bodamer.....................    33  General Manager -- NY Systems (South)               
Michael G. Brewerton...............    33  General Manager -- WV Systems                       
Michael Bruno......................    31  General Manager -- NY Systems (North)               
Dwane Menke........................    33  General Manager -- MN-6 RSA                         
Larry Rosenblatt...................    32  General Manager -- Eau Claire, WI MSA; WI-1 RSA     
Thomas Scholato....................    50  General Manager -- PA-9 RSA                         
Dennis Stone.......................    37  General Manager -- Florence, AL MSA                 
Steven L. Tanner...................    31  General Manager -- Duluth, MN/Superior, WI MSA      
Mary Tavernini.....................    35  General Manager -- MI-1 RSA                         
David Wolmering....................    36  General Manager -- OH Systems                       

   D. MICHAEL KEY is the Company's Director of Engineering. Prior to joining
the Company in March 1995, Mr. Key was Director of Technical Operations with    
Sterling Cellular since 1990. Mr. Key has worked in the cellular industry since 
1987.                                                                           

RANDALL L. MATTSON is the Regional Operations Manager -- Upper Midwest
Cluster. Mr. Mattson previously served as the Senior System Manager for the     
Company's MI-1 RSA. Prior thereto, Mr. Mattson has worked in the cellular       
industry since 1987, including as Technical Manager for Metro Mobile and        
Operations Manager for C-TEC.                                                   

DONALD L. ANDERSON is the Regional Operations Manager -- Mid-Atlantic 
Cluster. Mr. Anderson has been involved in the telephone business for over      
thirty years. He worked for Citizens Telecom, formerly General Telephone        
Company, and prior to joining the Company he was Systems Manager for Highland   
Cellular D/B/A Cellular One.                                                    

52

424B1
53rd Page of 94
TOC
1st
Previous
Next
Bottom
Just 53rd

MARK DILCOM is the Director of Market Development. Prior to joining   
PriCellular in 1995, he was Senior Account Manager for Nextel and prior thereto,
held positions with Western Wireless Corporation.                               

   PAMELA FONTANA is Director of Corporate Development. Prior to joining the
Company, Ms. Fontana served in a similar capacity at Cellular Communications    
International, Inc. Ms. Fontana has an M.A. degree in international economics   
from the Johns Hopkins University and a B.A. degree from the University of      
Michigan.                                                                       

    JOSEPH A. BANASZEK is General Manager for the Company's Wausau, WI MSA and
WI-3 RSA. Prior to joining the Company in 1995, Mr. Banaszek ran cellular       
systems in Iowa for United States Cellular and Centennial Cellular.             

ALBERT BODAMER is General Manager for PriCellular's New York          
Systems -- South. Prior to joining the Company in January 1996, Mr. Bodamer     
worked in various capacities at Frontier Corporation (formerly Rochester        
Telephone) since 1986, most recently as General Manager of Resale and Paging    
Services. He holds a B.A. and an M.B.A. from the University of Rochester.       

MICHAEL G. BREWERTON is General Manager of the Company's West Virginia
Systems. Mr. Brewerton previously ran the Company's WI-3 RSA. Prior to joining  
PriCellular in 1994, he was East Tennessee Area Sales Manager for United States 
Cellular Corporation, responsible for its sales activities in Knoxville, TN and 
surrounding RSAs. From 1989 to 1992, Mr. Brewerton served as Senior Sales       
Manager for McCaw/AT&T Wireless' Denver MSA. Mr. Brewerton graduated from       
Louisiana State University.                                                     

MICHAEL BRUNO is General Manager of the Company's New York            
Systems -- North. Mr. Bruno was recently promoted to this position from his     
prior position as Sales Manager for the Company's OH-9 RSA. Prior to joining the
Company, Mr. Bruno served in sales management positions with United States      
Cellular and Sterling Cellular.                                                 

     DWANE MENKE is General Manager for the Company's MN-6 System. Previously he
served as Sales Manager for the Company's Duluth, MN MSA. Prior to joining the  
Company, Mr. Menke was Market Manager for Western Wireless Corporation.         

     LARRY ROSENBLATT is General Manager of PriCellular's Eau Claire, WI MSA and
WI-1 RSA. Mr. Rosenblatt has worked for Cellular One in Boston for the past five
years where he served as Branch Manager of SBC's Cellular One system in Eastern 
Massachusetts. Mr. Rosenblatt has an M.B.A. from Northeastern University.       

TOM SCHOLATO is General Manager for the PA-9 RSA. Prior to joining the
Company, Mr. Scholato served as Manager of Customer Service and Administration  
with United States Cellular Corporation in its Pennsylvania/West Virginia       
region. Prior thereto, he served as District Manager for Family Dollar Stores in
Pittsburgh for seven years. Mr. Scholato has a B.A. degree in Business          
Administration, summa cum laude, from Marywood University.                      

    DENNIS STONE is General Manager for the Company's Florence, AL MSA. He has
been with PriCellular since 1992. Mr. Stone previously served the Company's     
Wichita Falls System.                                                           

     STEVEN L. TANNER is General Manager of the Duluth, MN/Superior, WI MSA. Mr.
Tanner joined the Company in early 1995. Mr. Tanner has worked in the wireless  
industry for more than six years, including managing the St. Louis, MO paging   
system for American Paging. Mr. Tanner has a B.A. degree from Missouri Southern 
College.                                                                        

MARY TAVERNINI is General Manager for the Company's MI-1 RSA. Prior to
joining the Company in 1995, Ms. Tavernini was the manager of major accounts for
BellSouth Cellular in Milwaukee and had served in various other senior          
capacities for BellSouth. In 1993, Ms. Tavernini was named by Selling Magazine  
as a "selling allstar" for being the number one cellular sales executive in the 
United States.                                                                  

DAVID WOLMERING is General Manager in the Company's OH-7 RSA. Prior to
joining the Company, Mr. Wolmering served in a variety of capacities for        
Centennial Cellular Corporation since 1992, including General Manager of its    
Fort Wayne, Ind. MSA. Mr. Wolmering began his career in the cellular business in
1988 working for Motorola and later as Sales Manager for Metro Mobile in New    
Haven, CT.                                                                      

53

424B1
54th Page of 94
TOC
1st
Previous
Next
Bottom
Just 54th

PRINCIPAL AND SELLING STOCKHOLDERS

   The following table provides certain information regarding the beneficial
ownership of the Company's Common Stock as of June 30, 1996 by (i) each of the  
Company's directors and officers listed in the summary compensation table, (ii) 
all directors and officers as a group and (iii) each person known to the Company
to be the beneficial owner of 5% or more of any class of the Company's voting   
securities.                                                                     

                                                        · Enlarge/Download Table

                                              BENEFICIAL OWNERSHIP                                                          
                                                OF CLASS A AND B                                                            
                                                  COMMON STOCK                                                              
                                             BEFORE THE OFFERING(1)                 BENEFICIAL OWNERSHIP OF CLASS A AND B   
                                             -----------------------                  COMMON STOCK AFTER THE OFFERING(1)    
                                                          PERCENTAGE              ------------------------------------------
                                                              OF                               PERCENTAGE OF   PERCENTAGE OF
                                                           COMBINED     SHARES                   COMBINED        COMBINED   
          NAME OF BENEFICIAL OWNER             SHARES       CLASS     OFFERED(2)    SHARES        CLASSES         VOTING    
-------------------------------------------- -----------  ----------  ----------  -----------  -------------   -------------
                                                                                                                            
DIRECTORS AND OFFICERS                                                                                                      
Robert Price(3).............................   5,549,603     16.8%            --    6,049,603       18.4%           22.2%   
Stuart B. Rosenstein(4).....................     133,381      0.4             --      133,381        0.4             0.1    
Kim I. Pressman(5)..........................      35,937      0.1             --       35,937        0.1              --    
Steven Price(6).............................   3,527,936     11.4             --    3,527,936       11.4            19.1    
Brion B. Applegate(7).......................   2,371,896      7.6             --    2,371,896        7.6             9.8    
Tim R. Palmer(8)............................   5,290,976     17.2             --    3,240,976       10.5            18.5    
Scott Sperling(9)...........................   4,883,125     13.7                   4,883,125       13.7             2.8    
All directors and officers as a group (7                                                                                    
  persons)..................................  20,688,167     53.5             --   19,138,167       49.5            61.1    
OTHER 5% STOCKHOLDERS                                                                                                       
McCaw/AT&T Wireless Services, Inc.(10)......   5,230,035     17.0             --    5,230,035       17.0            21.4    
  (formerly McCaw)                                                                                                          
  5400 Carillon Point                                                                                                       
  Kirkland, WA 98033                                                                                                        
Aeneas Venture Corporation..................   5,290,976     17.2      2,050,000    3,240,976       10.5            18.5    
  (an affiliate of Harvard Private Capital                                                                                  
  Group, Inc.)(11)                                                                                                          
  600 Atlantic Avenue, 26th Floor                                                                                           
  Boston, MA 02210                                                                                                          
The Thomas H. Lee Company(12)...............   4,883,125     13.7             --    4,883,125       13.7             2.7    
  75 State Street                                                                                                           
  Boston, MA 02109                                                                                                          
Putnam Investments, Inc.(13)................   4,059,188     12.0             --    4,059,188       12.0             2.3    
  One Post Office Square                                                                                                    
  Boston, MA 02109                                                                                                          
Eileen Farbman(14)..........................   3,714,062     12.1             --    3,714,062       12.1            21.3    
  c/o Suite 3200                                                                                                            
  45 Rockefeller Plaza                                                                                                      
  NY, NY 10020                                                                                                              
Janus Capital Corp.(15).....................   3,063,438      9.9             --    3,063,438        9.9             1.8    
  100 Fillmore Street                                                                                                       
  Denver, CO 80206                                                                                                          
Spectrum Equity Investors, L.P.(16).........   2,371,896      7.6             --    2,371,896        7.6             9.8    
  121 High Street, 26th Floor                                                                                               
  Boston, MA 02110                                                                                                          
The Public School Employes' Retirement                                                                                      
  System(17)................................   2,441,563      7.3             --    2,441,563        7.3             1.4    
  5 North 5th Street, Box 125                                                                                               
  Harrisburg, PA 17108                                                                                                      
Price Communications Corporation(18)........   2,288,668      7.1             --    2,788,668        8.6             8.4    
  Suite 3200                                                                                                                
  45 Rockefeller Plaza                                                                                                      
  NY, NY 10020                                                                                                              
Leo Farbman(19).............................   1,218,750      4.0             --    1,218,750        4.0             7.0    
  c/o Suite 3200                                                                                                            
  45 Rockefeller Plaza                                                                                                      
  NY, NY 10020                                                                                                              
Alexandra Farbman(20).......................   1,218,750      4.0             --    1,218,750        4.0             7.0    
  c/o Suite 3200                                                                                                            
  45 Rockefeller Plaza                                                                                                      
  NY, NY 10020                                                                                                              

54

424B1
55th Page of 94
TOC
1st
Previous
Next
Bottom
Just 55th

                                                        · Enlarge/Download Table

                                              BENEFICIAL OWNERSHIP                                                          
                                                OF CLASS A AND B                                                            
                                                  COMMON STOCK                                                              
                                             BEFORE THE OFFERING(1)                 BENEFICIAL OWNERSHIP OF CLASS A AND B   
                                             -----------------------                  COMMON STOCK AFTER THE OFFERING(1)    
                                                          PERCENTAGE              ------------------------------------------
                                                              OF                               PERCENTAGE OF   PERCENTAGE OF
                                                           COMBINED     SHARES                   COMBINED        COMBINED   
          NAME OF BENEFICIAL OWNER             SHARES       CLASS     OFFERED(2)    SHARES        CLASSES         VOTING    
-------------------------------------------- -----------  ----------  ----------  -----------  -------------   -------------
                                                                                                                            
Stein Roe & Farnham                                                                                                         
  Incorporated(21)..........................   1,125,000      3.7             --    1,125,000        3.7             0.6    
  One South Wacker Drive                                                                                                    
  Chicago, IL 60606                                                                                                         
Neuberger & Berman L.P.(22).................     798,438      2.6             --      798,438        2.6             0.5    
  605 Third Avenue                                                                                                          
  New York, NY 10158                                                                                                        
Sandler Capital Management(23)..............     779,968      2.5             --      779,968        2.5             0.4    
  767 Fifth Avenue                                                                                                          
  New York, NY 10153                                                                                                        
Dominion Cellular, Inc.(24).................     718,860      2.3        450,000      268,860        0.9             0.2    
  355 Madison Avenue                                                                                                        
  Morristown, NJ 07960                                                                                                      

---------------                                                                 
 (1) As used in this table "beneficial ownership" means the sole or shared power
     to vote or direct the voting or to dispose or direct the disposition of any
    security. A person is deemed as of any date to have "beneficial ownership"
of any security that such person has a right to acquire within 60 days
    after such date. Any security that any person named above has the right to
acquire within 60 days is deemed to be outstanding for purposes of    
   calculating the ownership percentage of such person, but is not deemed to
    be outstanding for purposes of calculating the ownership percentage of any
other person.                                                         

(2) Assumes no exercise of the Underwriters' over-allotment option to purchase
    up to 375,000 shares of Class A Common Stock. All of the shares to be sold
pursuant to the over-allotment option will be sold by Aeneas Venture  
Corporation.                                                          

(3) Consists of 340,625 shares of Class B Common Stock owned directly by Mr.  
  Price, 1,104,687 shares of Class B Common Stock held by Robert Price and
    Eileen Farbman, as joint tenants, 1,104,687 shares of Class B Common Stock
held by Robert Price and Steven Price, as joint tenants, options to   
 purchase 710,936 shares of Class A Common Stock granted pursuant to the
  Company's 1994 Stock Option Plan that are currently exercisable, 833,000
     shares of Class A Common Stock held by Price Communications and warrants to
purchase 1,455,668 shares of Class B Common Stock held by Price       
Communications that are currently exercisable. See footnote (18).     

(4) Consists of 3,125 shares of Class B Common Stock owned directly by Mr.    
Rosenstein, 3,382 shares of Class A Common Stock owned directly by Mr.
    Rosenstein, 4,062 shares of Class A Common Stock held by Stuart Rosenstein
as custodian for his daughter Amanda Rosenstein, 156 shares of Class A
 Common Stock held by Stuart Rosenstein as custodian for his son Gilbert
   Rosenstein and options to purchase 122,656 shares of Class A Common Stock
     granted pursuant to the Company's 1994 Stock Option Plan that are currently
     exercisable. Does not include options to purchase 117,187 shares of Class A
    Common Stock granted pursuant to the Company's 1994 Stock Option Plan that
are not exercisable within 60 days.                                   

(5) Consists of 3,125 shares of Class B Common Stock owned directly by Ms.    
Pressman and options to purchase 32,812 shares of Class A Common Stock
     granted pursuant to the Company's 1994 Stock Option Plan that are currently
exercisable.                                                          

(6) Consists of 2,203,687 shares of Class B Common Stock owned directly by Mr.
  Price, 1,104,687 shares of Class B Common Stock held by Robert Price and
     Steven Price, as joint tenants, 96,906 shares of Class A Common Stock owned
 directly by Mr. Price and options to purchase 122,656 shares of Class A
    Common Stock granted pursuant to the Company's 1994 Stock Option Plan that
are currently                                                         

55

424B1
56th Page of 94
TOC
1st
Previous
Next
Bottom
Just 56th

     exercisable. Does not include options to purchase 117,187 shares of Class A
    Common Stock granted pursuant to the Company's 1994 Stock Option Plan that
are not exercisable within 60 days. Steven Price is the son of Robert 
Price.                                                                

(7) All of such shares of Class A Common stock and Class B Common Stock are   
 owned by Spectrum and attributed to Mr. Applegate, a General Partner of
  Spectrum, pursuant to the definition of beneficial ownership provided in
footnote (1).                                                         

(8) All of such shares of Class A Common stock and Class B Common Stock are   
   owned by Harvard Private Capital and attributed to Mr. Palmer, a Managing
Director of Harvard Private Capital, pursuant to the definition of    
beneficial ownership provided in footnote (1).                        

(9) All such shares of Class A Common Stock are owned by The Thomas H. Lee    
   Company and attributed to Mr. Sperling, a Managing Director of The Thomas
     H. Lee Company, pursuant to the definition of beneficial ownership provided
in footnote (1).                                                      

(10) Consists of 3,390,625 shares of Class B Common Stock and 1,839,410 shares  
of Class A Common Stock.                                              

(11) Consists of 795,975 shares of Class A Common Stock, 4,449,981 shares of    
    Class B Common Stock currently outstanding and warrants to purchase 45,020
shares of Class B Common Stock that are currently exercisable. The per
  share price at which shares may be purchased pursuant to the warrants is
$5.94 subject to adjustment.                                          

(12) Consists of 4,883,125 shares of Class A Common Stock currently issuable    
    (subject to adjustments) upon conversion of 54,728 shares of the Company's
     Series A Cumulative Convertible Preferred Stock (the "Convertible Preferred
Stock") held by Thomas H. Lee Equity Fund III L.P. and 5,272 shares of
    Convertible Preferred Stock held by THL-CCI Investors Limited Partnership.
See "Description of Capital Stock".                                   

(13) Consists of 3,142,000 shares of Class A Common Stock issuable upon         
conversion of the Company's outstanding 10 3/4% Senior Subordinated   
  Convertible Discount Notes due 2004 and 917,188 shares of Class A Common
    Stock. Information with respect to the shares of Class A Common Stock held
is based on a Schedule 13G dated February 8, 1995, which reflects the 
     collective beneficial ownership of Marsh & McLennan Companies, Inc., Putnam
   Investments, Inc. and its two wholly owned registered investment advisers
    (Putnam Investment Management, Inc. and The Putnam Advisory Company, Inc.)
and the Putnam New Opportunities Fund (the "Fund") (collectively, the 
"Putnam Entities"). According to the Schedule 13G, none of the Putnam 
     Entities have the sole power to vote or dispose of any such shares of Class
     A Common Stock nor (except the Fund with respect to 405,000 of such shares)
    the shared power to vote any of such shares and all of the Putnam Entities
have the shared power to dispose of such shares.                      

(14) Consists of 171,875 shares of Class B Common Stock owned directly by Ms.   
    Farbman, 1,104,687 shares of Class B Common Stock held by Robert Price and
  Eileen Farbman, as joint tenants, 609,375 shares of Class B Common Stock
     held by Eileen Farbman and Leo Farbman, as joint tenants, 609,375 shares of
     Class B Common Stock held by Eileen Farbman and Alexandra Farbman, as joint
   tenants and 609,375 shares of Class B Common Stock held by Eileen Farbman
     as custodian for Leo Farbman UGTMA until age 21 and 609,375 shares of Class
  B Common Stock held by Eileen Farbman as custodian for Alexandra Farbman
UGTMA until age 21. Eileen Farbman is the daughter of Robert Price.   

(15) Consists of 3,063,438 shares of Class A Common Stock.                      

(16) Consists of 1,644,791 shares of Class B Common Stock, 238,793 shares of    
  Class A Common Stock currently outstanding and 488,312 shares of Class A
Common Stock currently issuable upon conversion of 6,000 shares of the
Convertible Preferred Stock.                                          

56

424B1
57th Page of 94
TOC
1st
Previous
Next
Bottom
Just 57th

(17) Consists of 2,441,563 shares of Class A Common Stock currently issuable    
upon conversion of 30,000 shares of the Convertible Preferred Stock.  

(18) Consists of 833,000 shares of Class A Common Stock currently outstanding   
    and 1,455,668 shares of Class B Common Stock issuable pursuant to warrants
    that are currently exercisable. The per share price at which shares may be
  purchased pursuant to the warrants is $5.94 subject to adjustment. Price
Communications Corporation, an affiliate of the Company, has agreed to
purchase 500,000 of the shares of Class A Common Stock offered hereby.

(19) Consists of 609,375 shares of Class B Common Stock held by Eileen Farbman  
and Leo Farbman, as joint tenants and 609,375 shares of Class B Common
   Stock held by Eileen Farbman as custodian for Leo Farbman UGTMA until age
    21. Leo Farbman is the son of Eileen Farbman and grandson of Robert Price.

(20) Consists of 609,375 shares of Class B Common Stock held by Eileen Farbman  
and Alexandra Farbman, as joint tenants and 609,375 shares of Class B 
Common Stock held by Eileen Farbman as custodian for Alexandra Farbman
     UGTMA until age 21. Alexandra Farbman is the daughter of Eileen Farbman and
granddaughter of Robert Price.                                        

(21) Represents 1,125,000 shares of Class A Common Stock. Information is based  
  on a Schedule 13G dated February 12, 1996, which reflects the collective
   beneficial ownership of Stein Roe & Farnham Incorporated ("SR&F") and the
Stein Roe Special Fund, Inc. (the "Special Fund"). According to the   
  Schedule 13G, the Special Fund has the sole power to vote such shares of
     Class A Common Stock and SR&F has the sole power to dispose of such shares.

(22) Represents 798,438 shares of Class A Common Stock. Information is based on 
a Schedule 13G dated February 12, 1996, which reflects the collective 
beneficial ownership of Neuberger & Berman L.P., Neuberger & Berman   
   Management Inc. and Neuberger & Berman Focus Portfolio (collectively, the
     "Neuberger Entities"). According to the Schedule 13G, each of the Neuberger
     Entities has shared power to vote or dispose of any of such shares of Class
A Common Stock.                                                       

(23) Represents 779,968 shares of Class A Common Stock. Information is based on 
a Schedule 13D dated June 27, 1996, which reflects the collective     
     beneficial ownership of Sandler Capital Management ("SCM"), Harvey Sandler,
  Barry Lewis, John Kornreich, Michael Marocco, Andrew Sandler and Phyllis
    Sandler. Harvey Sandler and Phyllis Sandler have sole power to vote and to
dispose of 150,218 and 16,775 of such shares of Class A Common Stock, 
    respectively. SCM and each of Harvey Sandler, Barry Lewis, John Kornreich,
     Michael Marocco and Andrew Sandler have shared power to vote and to dispose
of 278,975 and 334,000 of such shares, respectively.                  

(24) Consists of 718,860 shares of Class A Common Stock.                        

57

424B1
58th Page of 94
TOC
1st
Previous
Next
Bottom
Just 58th

DESCRIPTION OF CAPITAL STOCK

    The authorized capital stock of the Company consists of 100,000,000 shares
of Class A Common Stock, par value $.01 per share, 20,000,000 shares of Class B 
Common Stock, par value $.01 per share, and 10,000,000 shares of Preferred      
Stock, issuable in series. As of July 30, 1996, there were 13,575,649 shares of 
Class A Common Stock, 17,218,621 shares of Class B Common Stock and 96,000      
shares of Series A Cumulative Convertible Preferred Stock outstanding. The      
following summary description of the capital stock of the Company is qualified  
in its entirety by reference to the Certificate of Incorporation and the Bylaws 
of the Company, copies of which have been filed as exhibits to the Registration 
Statement of which this Prospectus is a part.                                   

COMMON STOCK                                                                    

DIVIDENDS                                                                   

    The holders of Common Stock will be entitled to receive dividends when and
as dividends are declared by the Board of Directors of the Company out of funds 
legally available therefor, provided that, if any shares of Preferred Stock are 
at the time outstanding, the payment of dividends on the Common Stock or other  
distributions may be subject to the declaration and payment of full cumulative  
dividends on outstanding shares of Preferred Stock. Payment of cash dividends on
the Common Stock is currently prohibited by certain provisions in the Company's 
financing arrangements. Holders of Class A Common Stock and Class B Common Stock
will be entitled to share ratably, as a single class, in any dividends paid on  
the Common Stock. No dividend may be declared or paid in cash, property, Common 
Stock or Preferred Stock convertible into Common Stock on either the Class A    
Common Stock or Class B Common Stock unless a corresponding dividend is paid    
simultaneously on the other class of Common Stock. If stock dividends are       
declared, holders of Class A Common Stock will receive shares of Class A Common 
Stock and holders of Class B Common Stock will receive shares of Class B Common 
Stock. See "Price Range of Class A Common Stock and Dividend Policy".           

VOTING RIGHTS                                                               

 Except for matters where applicable law requires the approval of one or
both classes of Common Stock voting as separate classes and as otherwise        
described below, holders of Class A Common Stock and Class B Common Stock vote  
as a single class on all matters submitted to a vote of the stockholders,       
including the election of directors. Holders of Class A Common Stock are        
entitled to one vote per share and holders of Class B Common Stock are entitled 
to ten votes per share. Under Delaware law, the affirmative vote of the holders 
of a majority of the outstanding shares of Class A Common Stock would be        
required to approve, among other matters, an adverse change in the powers,      
preferences or special rights of the shares of Class A Common Stock.            

CONVERSION RIGHTS                                                           

     Shares of Class B Common Stock are convertible into Class A Common Stock on
a one-to-one basis at any time at the option of the holders thereof. See        
"-- Transferability". In addition, in the event that any shares of Class B      
Common Stock are transferred pursuant to an offering registered under the       
Securities Act or pursuant to Rule 144 promulgated thereunder, then, without any
action on the part of the holder thereof, each such share of Class B Common     
Stock will automatically convert into a share of Class A Common Stock.          

LIQUIDATION RIGHTS                                                          

Upon any liquidation, dissolution or winding up of the affairs of the 
Company, whether voluntary or involuntary, any assets remaining after the       
satisfaction in full of the prior rights of creditors, and the aggregate        
liquidation preference of any Preferred Stock then outstanding will be          
distributed to the holders of Class A Common Stock and Class B Common Stock,    
ratably as a single class in proportion to the number of shares held by them.   

58

424B1
59th Page of 94
TOC
1st
Previous
Next
Bottom
Just 59th

REORGANIZATION, CONSOLIDATION OR MERGER                                     

   In the event of a reorganization, consolidation or merger of the Company,
each holder of a share of Class A Common Stock shall be entitled to receive the 
same kind and amount of property receivable by a holder of a share of Class B   
Common Stock and each holder of a share of Class B Common Stock shall be        
entitled to receive the same kind and amount of property receivable by a holder 
of Class A Common Stock.                                                        

PREEMPTIVE RIGHTS                                                           

The holders of Class A Common Stock and Class B Common Stock are not  
entitled to preemptive or subscription rights except for McCaw/AT&T Wireless,   
which has been granted preemptive rights by the Company. Pursuant to the        
Stockholders Agreement, subject to certain limitations, in the event that the   
Company issues to a third party any stock, rights or instruments, as defined in 
the agreement, McCaw/AT&T Wireless will have the right to purchase stock, rights
or instruments on the same terms as the third party so as to maintain the same  
proportional interest of the fully diluted equity securities of the Company as  
was held by McCaw/AT&T Wireless prior to the issuance of such stock, rights or  
instruments.                                                                    

TRANSFERABILITY                                                             

  The Company's Amended and Restated Certificate of Incorporation does not
restrict the transfer of shares of Common Stock. Certain stockholders of the    
Company, however, have granted certain other stockholders rights of first       
refusal and co-sale rights. Shares of Class B Common Stock may be converted into
shares of Class A Common Stock and sold at any time provided that either such   
shares have been registered in accordance with the Securities Act or are sold   
pursuant to an applicable exemption from the registration requirements of the   
Securities Act. See "-- Conversion Rights". The Company has granted each of the 
existing holders of Class B Common Stock certain registration rights with       
respect to their shares of Common Stock.                                        

TRANSFER AGENT AND REGISTRAR OF COMMON STOCK                                

The transfer agent and registrar for the Common Stock is Harris Trust 
Company of New York. The principal address of the transfer agent and registrar  
is 77 Water Street, New York, New York 10005.                                   

PREFERRED STOCK                                                                 

 Pursuant to the Certificate of Incorporation, the Board of Directors is
authorized to establish and designate one or more series of Preferred Stock,    
without further authorization of the Company's stockholders, and to fix the     
number of shares, the dividend and the relative rights, preferences and         
limitations of any such series. Thus, any series may, if so determined by the   
Board of Directors, have full voting rights with the Class A Common Stock or    
Class B Common Stock or superior or limited voting rights, be convertible into  
Class A Common Stock or Class B Common Stock or another security of the Company,
and have such other relative rights, preferences and limitations as the Board of
Directors shall determine. As a result, any class or series of Preferred Stock  
could have rights which would adversely affect the voting power of the Common   
Stock. The shares of any class or series of Preferred Stock need not be         
identical.                                                                      

SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK                             

    The Board of Directors has designated 96,000 shares of Series A Cumulative
Convertible Preferred Stock. The holders of shares of the Series A Cumulative   
Convertible Preferred Stock are entitled to receive cumulative annual dividends,
when, as and if declared by the Board of Directors out of funds legally         
available therefor, at a rate of 6.25% per annum per share calculated as a      
percentage of $1,000, compounded quarterly, from and including the date of      
original issuance until the redemption or conversion of the Series A Cumulative 
Convertible Preferred Stock. Dividends on the Series A Cumulative Convertible   
Preferred Stock will not be paid in cash but will accrue and be cumulative.     

59

424B1
60th Page of 94
TOC
1st
Previous
Next
Bottom
Just 60th

     In the event that the Company declares, orders, pays or makes a dividend or
other distribution on the Common Stock (subject to certain exceptions), the     
holders of shares of the Series A Cumulative Convertible Preferred Stock shall  
be entitled to receive the same dividend or distribution. In addition to any    
voting rights provided by law, the holders of shares of Series A Cumulative     
Convertible Preferred Stock shall be entitled to vote on all matters voted on by
holders of the capital stock of the Company into which such shares of Series A  
Cumulative Convertible Preferred Stock is convertible. With respect to any such 
vote, each share of Series A Cumulative Convertible Preferred Stock shall       
entitle the holder thereof to cast the number of votes equal to the number of   
votes which could be cast in such vote by a holder of the shares of capital     
stock of the Company into which such share of Series A Cumulative Convertible   
Preferred Stock is convertible on the record date for such vote.                

   In the event that the trading price of the Class A Common Stock equals or
exceeds $18.40 per share for 10 trading days during any period of 15 consecutive
trading days, the Company shall have the right to redeem all or a portion of the
outstanding shares of Series A Cumulative Convertible Preferred Stock by paying 
therefor in cash $1,000 per share, plus all accrued and unpaid dividends to the 
date of redemption and the "premium amount". Pursuant to the certificate of     
designation, "premium amount", as of the date of conversion or redemption, means
an amount calculated to provide a holder of shares of the Series A Cumulative   
Convertible Preferred Stock, as of such date, with a yield of 6.25% on $1,000   
per share of Series A Cumulative Convertible Preferred Stock, compounded        
quarterly, from the date of conversion or redemption to and including the fifth 
anniversary of the date of the original issuance of the Series A Cumulative     
Convertible Preferred Stock.                                                    

    In addition to the right of redemption of the Company described above, any
holder of shares of Series A Cumulative Convertible Preferred Stock may require 
the Company to redeem, by paying therefor cash as described in the preceding    
paragraph, any or all of the shares of Series A Cumulative Convertible Preferred
Stock held by such holder in the event of a "change in control" (as defined     
below); provided, however, that if the change in control is the result of a     
tender offer, exchange offer, merger, reorganization, consolidation or other    
similar transaction where the holders of the Common Stock are entitled to       
receive consideration for their shares of Common Stock over 50% of the fair     
market value of which consideration consists of cash, then the redemption price 
shall be an amount in cash per share at the election of the holder either (i) as
described in the preceding paragraph or (ii) equal to the closing price of the  
Common Stock at such time multiplied by the number of shares of Class A Common  
Stock into which such share of Series A Cumulative Convertible Preferred Stock  
is then convertible. Pursuant to the certificate of designation, "change in     
control" means, among other things, the acquisition by a person (other than the 
Company or related persons) of beneficial ownership of 50% or more of the       
combined voting power of the Company.                                           

60

424B1
61st Page of 94
TOC
1st
Previous
Next
Bottom
Just 61st

   Each share of the Series A Cumulative Convertible Preferred Stock may, at
the option of the holder thereof, be converted at any time into a number of     
shares of Class A Common Stock equal to the quotient obtained by dividing the   
"conversion value" by the conversion price of $11.04 subject to adjustment.     
Pursuant to the certificate of designation, "conversion value" per share of     
Series A Cumulative Convertible Preferred Stock shall be an amount equal to     
$1,000 plus accrued and unpaid dividends thereon to the date of conversion and  
the premium amount; provided, however, that in the event of a conversion during 
the periods specified below and which conversion is not (i) as a result of the  
Company exercising its optional redemption or in connection with a change of    
control or liquidation, (ii) at such time when the Company owns less than 90% of
the voting securities of PriCellular Wireless Corporation or (iii) at such time 
as certain of the existing stockholders have the power to vote securities of the
Company which represent 50% or more of the combined voting power of the Company,
the conversion value with respect to each share of Series A Cumulative          
Convertible Preferred Stock then being converted shall be reduced by the        
"premium amount" plus the amount set forth below:                               

                                                                · Download Table

      CONVERSION DATE           REDUCTION TO CONVERSION VALUE
----------------------------    -----------------------------
                                                             
Prior to December 28, 1996                 $133.33           
December 28, 1996                                            
  through December 28, 1997                $100.00           
December 29, 1997                                            
  through December 28, 1998                $ 66.67           

    In the event of any liquidation, dissolution or winding-up of the Company,
no distribution shall be made to the holders of junior securities, unless prior 
thereto, the holders of the shares of Series A Cumulative Convertible Preferred 
Stock shall have received in cash the greater of (x) $1,000 per share plus all  
accrued and unpaid dividends to the date of such payment and the "premium       
amount", if any, or (y) such amount per share as would have been payable had    
each such share been converted into Class A Common Stock immediately prior to   
such liquidation, dissolution or winding-up.                                    

BUSINESS COMBINATION STATUTE                                                    

Section 203 of the Delaware General Corporation Law ("DGCL") prohibits
certain transactions between a Delaware corporation and an "interested          
stockholder," which is defined as a person who, together with any affiliates    
and/or associates of such person, beneficially owns, directly or indirectly, 15%
or more of the outstanding voting shares of a Delaware corporation. Due to the  
timing of ownership of the Company's securities by members of the Price family, 
McCaw and Harvard Private Capital, none of such holders will be an "interested  
stockholder" under Section 203. This provision prohibits certain business       
combinations (defined broadly to include mergers, consolidations, sales or other
dispositions of assets having an aggregate value in excess of 10% of the        
consolidated assets of the corporation, and certain transactions that would     
increase the interested stockholder's proportionate share ownership in the      
corporation) between an interested stockholder and a corporation for a period of
three years after the date the interested stockholder acquired its stock, unless
(i) the business combination is approved by the corporation's board of directors
prior to the date the interested stockholder acquired shares; (ii) the          
interested stockholder acquired at least 85% of the voting stock of the         
corporation in the transaction in which it became an interested stockholder; or 
(iii) the business combination is approved by a majority of the board of        
directors and by the affirmative vote of two-thirds of the votes entitled to be 
cast by disinterested stockholders at an annual or special meeting.             

61

424B1
62nd Page of 94
TOC
1st
Previous
Next
Bottom
Just 62nd

SHARES ELIGIBLE FOR FUTURE SALE 

  Future sales of substantial amounts of Common Stock in the public market
could adversely affect prevailing market prices.                                

    Upon the closing of this offering, the Company will have 30,794,270 shares
of Common Stock outstanding. Of these shares, 12,990,264 of the shares of Class 
A Common Stock will be freely tradeable without restriction (subject to the     
volume and other limitations under Rule 144 in the case of affiliates of the    
Company) and the remaining 1,839,410 shares of Class A Common Stock and the     
15,964,596 outstanding shares of Class B Common Stock will be "restricted       
securities" as defined in Rule 144. Without consideration of the contractual    
restrictions described below, 15,964,596 of the restricted shares would be      
available for immediate sale in the public market subject to volume and other   
limitations under Rule 144. All of the Selling Stockholders have agreed, subject
to certain limitations, that for a period of 90 days after the date of this     
offering they will not, without the prior written consent of Merrill Lynch,     
Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), offer, sell, contract to 
sell, grant any option to purchase, or otherwise dispose of any Common Stock or 
any securities convertible into or exercisable or exchangeable for Common Stock 
or in any other manner transfer all or a portion of the economic consequences   
associated with the ownership of Common Stock. If and to the extent Merrill     
Lynch should release such shares earlier, they would be available for immediate 
sale in the public market (subject to the volume and other limitations under    
Rule 144 in the case of affiliates of the Company) subject to the limitation of 
the Stockholders Agreement.                                                     

In general, under Rule 144 as currently in effect, if two years have  
elapsed since the later of the date of acquisition of restricted shares from the
Company or any "affiliate" of the Company, as that term is defined under the    
Securities Act, the acquiror or subsequent holder thereof is entitled to sell   
within any three-month period a number of shares that does not exceed the       
greater of 1% of the then outstanding shares of the Company's Class A Common    
Stock (14,826,674 shares immediately after this offering) or the average weekly 
trading volume of the Company's Common Stock on all exchanges and/or reported   
through the automated quotation system of a registered securities association   
during the four calendar weeks preceding the date on which notice of the sale is
filed with the Securities and Exchange Commission. Sales under Rule 144 are also
subject to certain manner of sales provisions, notice requirements and the      
availability of current public information about the Company. If three years    
have elapsed since the later of the date of acquisition of restricted shares    
from the Company or from any affiliate of the Company, and the acquiror or      
subsequent holder thereof is deemed not to have been an affiliate of the Company
at any time during the 90 days preceding a sale, such person would be entitled  
to sell such shares in the public market under Rule 144(k) without regard to the
volume limitations, manner of sale provisions, public information requirements  
or notice requirements.                                                         

Following the closing of this offering, the holders of 11,314,848     
outstanding shares of Common Stock and the holders of securities convertible    
into or exercisable for 11,000,020 shares of Common Stock are entitled to       
certain rights with respect to the registration of all such shares under the    
Securities Act.                                                                 

62

424B1
63rd Page of 94
TOC
1st
Previous
Next
Bottom
Just 63rd

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
Selling Stockholders have agreed to sell to each of the Underwriters named      
below, and each of such Underwriters, for whom Merrill Lynch, Pierce, Fenner &  
Smith Incorporated ("Merrill Lynch"), PaineWebber Incorporated, NatWest         
Securities Limited and Wasserstein Perella Securities, Inc. are acting as       
representatives, has severally agreed to purchase from the Selling Stockholders,
the respective number of shares of Class A Common Stock set forth opposite its  
name below:                                                                     

                                                                · Download Table

                                                                NUMBER OF    
                                                                SHARES OF    
                                                                 CLASS A     
                        UNDERWRITER                            COMMON STOCK  
------------------------------------------------------------   ------------  
                                                                             
Merrill Lynch, Pierce, Fenner & Smith                                        
             Incorporated...................................    1,000,000    
PaineWebber Incorporated....................................    1,000,000    
NatWest Securities Limited..................................      250,000    
Wasserstein Perella Securities, Inc.........................      250,000    
                                                               ------------  
             Total..........................................    2,500,000    
                                                               ==============

Under the terms and conditions of the Underwriting Agreement, the     
Underwriters are committed to take and pay for all of the shares offered hereby,
if any are taken. Price Communications Corporation, an affiliate of the Company,
has agreed to purchase 500,000 of the shares of Class A Common Stock offered    
hereby.                                                                         

  The Underwriters have advised the Selling Stockholders that they propose
initially to offer the shares of Class A Common Stock to the public at the      
public offering price set forth on the cover page of this Prospectus, and to    
certain dealers at such price less a concession not in excess of $.27 per share.
The Underwriters may allow, and such dealers may reallow, a discount not in     
excess of $.10 per share on sales to certain other dealers. After the shares of 
Class A Common Stock are released for sale to the public, the public offering   
price, concession and discount may be changed.                                  

The Selling Stockholders have granted the Underwriters an option      
exercisable for 30 days after the date hereof to purchase up to 375,000         
additional shares of Class A Common Stock to cover over-allotments, if any, at  
the public offering price, less the underwriting discount. If the Underwriters  
exercise this option, each of the Underwriters will have a firm commitment,     
subject to certain conditions, to purchase approximately the same percentage    
thereof which the number of shares to be purchased by it shown in the foregoing 
table is of the 2,500,000 shares of Class A Common Stock initially offered      
hereby.                                                                         

    The Selling Stockholders, certain principal stockholders and the directors
and executive officers of the Company have agreed that, during the period       
beginning from the date of this Prospectus and continuing to and including the  
date 90 days after the date of this Prospectus, they will not offer, sell,      
contract to sell or otherwise dispose of any securities of the Company which are
substantially similar to the shares of Class A Common Stock, subject to certain 
exceptions, or which are convertible or exchangeable into securities which are  
substantially similar to the shares of Class A Common Stock, without the prior  
written consent of Merrill Lynch except for the shares of Class A Common Stock  
offered in connection with this Offering.                                       

   The Company has agreed that, during the period beginning from the date of
this Prospectus and continuing to and including the date 90 days after the date 
of this Prospectus, it will not offer, sell, contract to sell or otherwise      
dispose of any securities of the Company which are substantially similar to the 
shares of Class A Common Stock, subject to certain exceptions including certain 
issuances of Class A Common Stock in connection with acquisitions, or which are 
convertible or exchangeable into securities which are substantially similar to  
the shares of Class A Common Stock, without the prior written consent of Merrill
Lynch.                                                                          

63

424B1
64th Page of 94
TOC
1st
Previous
Next
Bottom
Just 64th

     The Company's Class A Common Stock is traded on the American Stock Exchange
under the symbol "PC". The Class A Common Stock also trades on the Chicago Stock
Exchange under the symbol "PC.M" and on the Pacific Stock Exchange under the    
symbol "PC.P".                                                                  

The Company and the Selling Stockholders have agreed to indemnify the 
several Underwriters against certain liabilities, including liabilities under   
the Securities Act.                                                             

    NatWest Securities Limited, a United Kingdom broker-dealer and a member of
the Securities and Futures Authority Limited, has agreed that, as part of the   
distribution of the Common Stock offered hereby and subject to certain          
exceptions, it will not offer or sell any Common Stock within the United States,
its territories or possessions or to persons who are citizens thereof or        
residents therein. The Underwriting Agreement does not limit the sale of the    
Common Stock offered hereby outside of the United States.                       

   NatWest Securities Limited has represented and agreed that (i) it has not
offered or sold and will not offer to sell any shares of Common Stock to persons
in the United Kingdom, except to persons whose ordinary activities involve them 
in acquiring, holding, managing or disposing of investments (as principal or    
agent) for the purpose of their businesses or otherwise in circumstances which  
have not resulted and will not result in an offer to the public in the United   
Kingdom within the meaning of the Public Offers of Securities Regulations 1995  
or the Financial Services Act 1986 (the "Act"), (ii) it has complied and will   
comply with all applicable provisions of the Act with respect to anything done  
by it in relation to the shares of Common Stock in, from or otherwise involving 
the United Kingdom and (iii) it has only issued or passed on, and will only     
issue or pass on, in the United Kingdom, any document which consists of or any  
part of listing particulars, supplementary listing particulars, or any other    
documant required or permitted to be published by listing rules under Part IV of
the Act, to a person who is of a kind described in Article 11(3) of the         
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1995 
or is a person to whom the document may otherwise lawfully be issued or passed  
on.                                                                             

LEGAL MATTERS 

     The validity of the Class A Common Stock and certain other legal matters in
connection with this offering will be passed upon for the Company by Davis Polk 
& Wardwell. Certain legal matters in connection with the Class A Common Stock   
offered hereby will be passed upon for the Underwriters by Cravath, Swaine &    
Moore.                                                                          

EXPERTS 

     The consolidated balance sheets of PriCellular Corporation and subsidiaries
as of December 31, 1995 and 1994 and the related consolidated statements of     
operations, stockholders' equity and cash flows for the three years ended       
December 31, 1995 appearing in this Prospectus and Registration Statement have  
been audited by Ernst & Young LLP, independent auditors, as set forth in their  
reports thereon appearing elsewhere herein and in the Registration Statement and
are included in reliance upon such reports given upon the authority of such firm
as experts in accounting and auditing.                                          

The combined financial statements of Illinois RSA 4 and 6 for the year
ended December 31, 1994 incorporated by reference herein have been audited by   
Ernst & Young LLP, independent auditors, as set forth in their report thereon   
incorporated by reference herein. Such financial statements have been           
incorporated herein by reference in reliance upon such report given upon the    
authority of such firm as experts in accounting and auditing.                   

   The consolidated balance sheets of Cellular Information Systems, Inc. and
subsidiaries as of December 31, 1993 and 1992 and September 30, 1994 and the    
related consolidated statements of operations, stockholders' deficit and cash   
flows for the years ended December 31, 1993, 1992 and 1991 and for the nine     
months ended September 30, 1994 incorporated by reference in this Prospectus    
have been audited by Coopers & Lybrand L.L.P., independent accountants, as      
stated in their reports incorporated by reference herein. The report on Cellular
Information Systems, Inc. includes explanatory paragraphs discussing the        
reorganization of CIS and certain of its subsidiaries under Chapter 11 of the   
United States Bankruptcy Code and the acquisition                               

64

424B1
65th Page of 94
TOC
1st
Previous
Next
Bottom
Just 65th

of CIS by PriCellular Corporation. The financial statements referred to above   
are incorporated by reference in this Prospectus and the Registration Statement 
in reliance upon the report of Coopers & Lybrand L.L.P. given upon the authority
of that firm as experts in accounting and auditing.                             

The balance sheets of Century Cellunet of Minnesota RSA #6, Inc. as of
December 31, 1993 and 1992 and the related statements of operations,            
stockholder's equity and cash flows for each of the years in the three year     
period ended December 31, 1993 incorporated by reference in this Prospectus and 
Registration Statement have been audited by KPMG Peat Marwick LLP, independent  
certified public accountants, as stated in their report incorporated by         
reference in the Registration Statement and are incorporated by reference in    
reliance upon such report given upon the authority of such firm as experts in   
accounting and auditing.                                                        

     The balance sheet of Cellular 10, Inc. as of December 31, 1993 and 1994 and
the related statements of operations, stockholders' deficit and cash flows for  
the two years ended December 31, 1994 incorporated by reference in this         
Prospectus and Registration Statement have been audited by Breazeale, Saunders &
O'Neil, Ltd., independent auditors, as set forth in their report thereon        
incorporated by reference elsewhere herein and in the Registration Statement and
is included in reliance upon such report given upon the authority of such firm  
as experts in accounting and auditing.                                          

     The balance sheet of Great Seal Cellular Limited Partnership as of December
31, 1993 and 1994 and the related statements of operations, partners' deficit   
and cash flows for the two years ended December 31, 1994 incorporated by        
reference in this Prospectus and Registration Statement have been audited by    
Arthur Andersen LLP, independent public accountants, as indicated in their      
report with respect thereto and is incorporated by reference in reliance upon   
the authority of such firm as experts in accounting and auditing in giving said 
reports.                                                                        

   The balance sheet of Dominion Cellular Inc., as of September 30, 1995 and
the related statements of operations, accumulated deficit and cash flows for the
year then ended incorporated by reference in this Prospectus and Registration   
Statement have been audited by Elliot H. Goldberg, CPA, P.C., independent       
auditor, as set forth in his report thereon incorporated by reference herein and
in the Registration Statement and is included in reliance upon such report given
upon the authority of such person as an expert in accounting and auditing.      

  The balance sheet of Parkersburg Cellular Telephone Company, Inc., as of
December 31, 1994 and the related statement of operations and changes in        
stockholders' equity and cash flows for the year ended December 31, 1994,       
incorporated by reference in this Prospectus and Registration Statement have    
been audited by Arthur Andersen LLP, independent public accountants, as         
indicated in their report with respect thereto and is incorporated by reference 
in reliance upon the authority of such firm as experts in accounting and        
auditing in giving said reports.                                                

  The balance sheet of USCOC of Ohio RSA #7, Inc., as of December 31, 1994
and the related statements of operations, retained earnings and cash flows for  
the year ended December 31, 1994, incorporated by reference in this Prospectus  
and Registration Statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report with respect thereto and is    
incorporated by reference in reliance upon the authority of such firm as experts
in accounting and auditing in giving said reports.                              

     The balance sheets of Cellular of Upstate New York, Inc. as of December 31,
1995 and 1994 and the statements of income and retained earnings, and cash flows
for the years then ended, incorporated by reference in this Registration        
Statement have been incorporated by reference herein in reliance on the report  
of Coopers & Lybrand L.L.P., independent accountants, given on the authority of 
that firm as experts in accounting and auditing.                                

     The balance sheet of Hudson Cellular Limited Partnership as of December 31,
1995 and the related statements of operations, cash flows and changes in        
partners' capital for the year then ended incorporated by reference in this     
Prospectus and Registration Statement have been audited by Arthur Andersen LLP, 
independent public accountants, as indicated in their report with respect       
thereto and is incorporated by reference in reliance upon the authority of such 
firm as experts in accounting and auditing in giving said reports.              

65

424B1
66th Page of 94
TOC
1st
Previous
Next
Bottom
Just 66th

    The balance sheet of PA Rural Service Area No. 9 Limited Partnership as of
December 31, 1995 and the related statements of operations, cash flows and      
changes in partners' capital for the year then ended incorporated by reference  
in this Prospectus and Registration Statement have been audited by Arthur       
Andersen LLP, independent public accountants, as indicated in their report with 
respect thereto and is incorporated by reference in reliance upon the authority 
of such firm as experts in accounting and auditing in giving said reports.      

     The balance sheet of Dutchess County Cellular Telephone Company, Inc. as of
December 31, 1995 and the related statements of operations, cash flows and      
retained earnings for the year then ended incorporated by reference in this     
Prospectus and Registration Statement have been audited by Arthur Andersen LLP, 
independent public accountants, as indicated in their report with respect       
thereto and is incorporated by reference in reliance upon the authority of such 
firm as experts in accounting and auditing in giving said reports.              

     The balance sheet of Horizon Cellular Telephone Company of Monongalia, L.P.
as of December 31, 1995, and the related statements of operations, partners'    
equity and cash flows for the year then ended incorporated by reference herein  
have been audited by Ernst & Young LLP, independent auditors, as set forth in   
their report thereon incorporated by reference herein. Such financial statements
have been incorporated herein by reference in reliance upon such report given   
upon the authority of such firm as experts in accounting and auditing.          

66

424B1
67th Page of 94
TOC
1st
Previous
Next
Bottom
Just 67th

CERTAIN TERMS 

Interests in cellular markets that are licensed by the Federal        
Communications Commission (the "FCC") are commonly measured on the basis of the 
population of the market served, with each person in the market area referred to
as a "Pop". The number of Pops or Net Pops owned is not necessarily indicative  
of the number of subscribers or potential subscribers. As used in this          
Prospectus, unless otherwise indicated, the term "Pops" means the estimate of   
the 1995 population of a Metropolitan Statistical Area ("MSA") or Rural Service 
Area ("RSA"), as derived from the 1995 Donnelley Market Information Service     
population estimates. The term "Net Pops" means the estimated population with   
respect to a given service area multiplied by the percentage interest that the  
Company owns in the entity licensed in such service area except in the case of  
the WI-2 RSA, in which the Company does not have an ownership interest but      
operates under an FCC grant of interim operating authority, all of the estimated
population of which is included. MSAs and RSAs are also referred to as          
"markets". The term "wireline" license refers to the license for any market     
initially awarded to a company or group that was affiliated with a local        
landline telephone carrier in the market, and the term "non-wireline" license   
refers to the license for any market that was initially awarded to a company,   
individual or group not affiliated with any landline carrier. The term "System" 
means an FCC-licensed cellular telephone system. The term "CTIA" means the      
Cellular Telecommunications Industry Association.                               

67

424B1
68th Page of 94
TOC
1st
Previous
Next
Bottom
Just 68th

INDEX TO FINANCIAL STATEMENTS 

PRICELLULAR CORPORATION AND SUBSIDIARIES                                        

                                                        · Enlarge/Download Table

                                                                                        PAGE
                                                                                            
Consolidated Balance Sheets -- June 30, 1996 (unaudited) and December 31, 1995........  F-2 
Unaudited Condensed Consolidated Statements of Operations for the six months ended          
  June 30, 1996 and 1995..............................................................  F-3 
Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended          
  June 30, 1996 and 1995..............................................................  F-4 
Notes to Unaudited Condensed Consolidated Financial Statements........................  F-5 
Report of Independent Auditors........................................................  F-8 
Consolidated Balance Sheets -- December 31, 1995 and 1994.............................  F-9 
Consolidated Statements of Operations -- Years Ended December 31, 1995, 1994 and            
  1993................................................................................  F-10
Consolidated Statements of Stockholders' Equity -- Years Ended December 31, 1995, 1994      
  and 1993............................................................................  F-11
Consolidated Statements of Cash Flows -- Years Ended December 31, 1995, 1994 and            
  1993................................................................................  F-12
Notes to Consolidated Financial Statements............................................  F-13

 F-1

424B1
69th Page of 94
TOC
1st
Previous
Next
Bottom
Just 69th

PRICELLULAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS 
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA) 

                                                        · Enlarge/Download Table

                                                                                   DECEMBER 31,
                                                                                       1995    
                                                                       JUNE 30,    ------------
                                                                         1996                  
                                                                      -----------              
                                                                      (Unaudited)              
                                                                                               
ASSETS                                                                                         
CURRENT ASSETS:                                                                                
  Cash and cash equivalents.........................................   $  54,993     $123,444  
  Accounts receivable (less allowance of $2,443 in 1996 and $2,076                             
     in 1995).......................................................      13,872        8,725  
  Inventory.........................................................       1,946        1,651  
  Other current assets..............................................         710        4,744  
                                                                        --------     --------  
Total current assets................................................      71,521      138,564  
FIXED ASSETS -- AT COST:                                                                       
  Cellular facilities and equipment.................................      66,372       58,050  
  Less accumulated depreciation.....................................     (10,124)      (6,009) 
                                                                        --------     --------  
Net fixed assets....................................................      56,248       52,041  
Investment in cellular operations...................................      37,629       37,386  
Cellular licenses (less accumulated amortization of $7,705 in 1996                             
  and $3,833 in 1995)...............................................     357,085      305,375  
Cellular licenses held for sale.....................................      33,226           --  
Deferred financing costs (less accumulated amortization of $1,842 in                           
  1996 and $1,029 in 1995)..........................................      10,621       11,386  
Other assets........................................................       1,831           14  
                                                                        --------     --------  
          Total assets..............................................   $ 568,161     $544,766  
                                                                        ========     ========  
LIABILITIES AND STOCKHOLDERS' EQUITY                                                           
CURRENT LIABILITIES:                                                                           
  Accounts payable and accrued expenses.............................   $  15,383     $ 15,777  
  Long-term debt -- current portion.................................         389        1,971  
  Income taxes payable..............................................         521          872  
  Other current liabilities.........................................       3,682        3,529  
                                                                        --------     --------  
     Total current liabilities......................................      19,975       22,149  
Long-term debt......................................................     354,408      315,216  
Other long-term liabilities.........................................       1,528        1,673  
STOCKHOLDERS' EQUITY:                                                                          
  Preferred Stock $0.01 par:                                                                   
     Series A, cumulative convertible: authorized 10,000,000 shares;                           
      issued and outstanding 96,000 shares..........................           1            1  
  Common Stock, $0.01 par:                                                                     
     Class A: Authorized 100,000,000 shares (1996) and 40,000,000                              
      shares (1995); issued and outstanding 13,575,649 (1996) and                              
      13,572,089 (1995).............................................         136          136  
     Class B: Authorized 20,000,000 shares; issued and outstanding                             
       17,218,621 (1996) and 17,269,624 (1995)......................         172          173  
  Additional paid-in capital........................................     214,443      215,618  
  Accumulated deficit...............................................     (22,502)     (10,200) 
                                                                        --------     --------  
     Total stockholders' equity.....................................     192,250      205,728  
                                                                        --------     --------  
          Total liabilities and stockholders' equity................   $ 568,161     $544,766  
                                                                        ========     ========  

See notes to consolidated financial statements. 

 F-2

424B1
70th Page of 94
TOC
1st
Previous
Next
Bottom
Just 70th

PRICELLULAR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) 
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 

                                                        · Enlarge/Download Table

                                                                            SIX MONTHS         
                                                                           ENDED JUNE 30       
                                                                      -----------------------  
                                                                        1996           1995    
                                                                      --------       --------  
                                                                                               
REVENUES                                                                                       
Cellular service..................................................... $ 44,711       $ 13,097  
Equipment sales......................................................    1,543            564  
Other................................................................    2,114             --  
                                                                      --------       --------  
                                                                        48,368         13,661  
COSTS AND EXPENSES                                                                             
Cost of cellular service.............................................   12,520          3,733  
Cost of equipment sold...............................................    4,415          1,499  
General and administrative...........................................    7,674          3,021  
Sales and marketing..................................................    7,524          2,007  
Depreciation and amortization........................................    9,900          3,999  
                                                                      --------       --------  
                                                                        42,033         14,259  
                                                                      --------       --------  
Operating income (loss)..............................................    6,335           (598) 
OTHER INCOME (EXPENSE)                                                                         
Gain on sale of investment in cellular operations....................       --         11,598  
Interest expense, net................................................  (19,137)        (6,668) 
Other income.........................................................      500             20  
                                                                      --------       --------  
                                                                       (18,637)         4,950  
                                                                      --------       --------  
Net income (loss)....................................................  (12,302)         4,352  
                                                                      ========       ========  
Net income (loss) after adjustment for accreted Preferred Stock                                
  dividend........................................................... $(15,360)      $  4,352  
Net income (loss) per common share................................... $   (.50)      $    .17  
                                                                      ========       ========  
Weighted average number of common shares used in computation of net                            
  income (loss) per common share..................................... 30,796,000     25,086,000

See notes to condensed consolidated financial statements. 

 F-3

424B1
71st Page of 94
TOC
1st
Previous
Next
Bottom
Just 71st

PRICELLULAR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) 
(DOLLARS IN THOUSANDS)

                                                        · Enlarge/Download Table

                                                                           SIX MONTHS         
                                                                          ENDED JUNE 30       
                                                                    ------------------------- 
                                                                      1996            1995    
                                                                    ---------       --------- 
                                                                                              
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES................ $  10,219       $  (5,416)
                                                                     --------        -------- 
INVESTING ACTIVITIES                                                                          
Redemption of short-term investments...............................        --             991 
Purchase of cellular equipment.....................................    (7,804)         (2,770)
Purchase of cellular licenses......................................    (1,494)           (156)
Sale of investment in cellular operations..........................        --          19,478 
Acquisition of cellular operations, net of cash of $16 (1995)......   (68,497)        (24,809)
Refund of escrow deposit for bid in Personal Communication System                             
  auction..........................................................     4,140              -- 
Amounts deposited in escrow to acquire cellular properties.........    (1,750)         (2,000)
Investment in cellular operations..................................      (264)           (944)
                                                                     --------        -------- 
Net cash used in investing activities..............................   (75,669)        (10,210)
                                                                     --------        -------- 
FINANCING ACTIVITIES                                                                          
Proceeds from sale of common stock, net............................        --           2,566 
Proceeds from exercise of stock options............................        15              -- 
Repayments of notes payable........................................    (1,776)         (2,670)
Payments for deferred financing costs..............................       (49)           (126)
Purchase of treasury stock.........................................      (450)           (738)
Costs incurred in connection with the registration of previously                              
  unregistered stock and the issue of preferred and common stock...      (741)             -- 
                                                                     --------        -------- 
Net cash used in financing activities..............................    (3,001)           (968)
                                                                     --------        -------- 
(Decrease) in cash and cash equivalents............................   (68,451)        (16,594)
Cash and cash equivalents at beginning of period...................   123,444          45,411 
                                                                     --------        -------- 
Cash and cash equivalents at end of period......................... $  54,993       $  28,817 
                                                                     ========        ======== 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                                              
Cash paid during the period for:                                                              
  Interest......................................................... $     456       $     398 
  Income taxes.....................................................       351           2,404 
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES                                         
Purchase of cellular equipment.....................................        --             289 
Debt issued in connection with acquisition of cellular license.....    19,429              -- 
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES                                         
Debt issued in exchange for unregistered debt......................        --         115,755 
Conversion of Class B Common Stock to Class A Common Stock.........         1              -- 

See notes to condensed consolidated financial statements. 

 F-4

424B1
72nd Page of 94
TOC
1st
Previous
Next
Bottom
Just 72nd

PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION                                                      

   The consolidated financial statements include the accounts of PriCellular
Corporation and its subsidiaries (the "Company"). All significant intercompany  
items and transactions have been eliminated.                                    

 The consolidated financial statements have been prepared by the Company
without audit, in accordance with rules and regulations of the Securities and   
Exchange Commission ("SEC"). In the opinion of management, the statements       
reflect all adjustments necessary for a fair presentation of the results for the
interim periods. The results of operations for the interim periods are not      
necessarily indicative of the results for a full year. These financial          
statements should be read in conjunction with the financial statements and notes
thereto included in the Company's 1995 Annual Report on Form 10-K.              

NET INCOME (LOSS) PER SHARE                                                     

     Net income (loss) per share for the six months ended June 30, 1996 and June
30, 1995 was computed by using the weighted average shares outstanding during   
the periods after giving retroactive effect to the 5-for-4 Class A and Class B  
Common Stock splits in March 1996 and August 1995. The net loss per common share
was increased for the impact of the accreted dividends attributable to the      
Company's 6 1/4% Series A Cumulative Preferred Stock.                           

2. ACQUISITION OF CELLULAR OPERATIONS                                         

NEW YORK CLUSTER                                                                

     During April 1996, the Company consummated the acquisitions of the NY-6 RSA
and 83% of the Dutchess County, NY MSA ("Poughkeepsie, NY MSA") from United     
States Cellular Corporation, boosting its New York contiguous cluster to over   
750,000 Pops.                                                                   

    The NY-6 RSA consists of approximately 111,000 Pops in Greene and Columbia
Counties between Albany and New York City. The NY-6 RSA abuts PriCellullar's    
previously acquired NY-5 RSA and includes 30 miles of the New York State        
Thruway, 10 miles of the Interstate connecting the New England Thruway with the 
New York State Thruway in Albany and 30 miles of the Taconic State Parkway. The 
acquisition price of the NY-6 RSA was approximately $19,800,000.                

The Poughkeepsie, NY MSA abuts the Company's NY-6 RSA and NY-5 RSA and
extends the Company's New York cluster across the Hudson Valley from the        
Connecticut and Massachusetts border 100 miles west to the Binghamton area. The 
MSA has approximately 263,000 Pops of which the Company acquired 83% for $178   
per Pop or $38,900,000, with one-half paid in cash and the balance in a         
three-year prime note with a bullet maturity.                                   

MID-ATLANTIC CLUSTER                                                            

During February 1996 the Company consummated the acquisition of the   
non-wireline cellular system serving the PA-9 RSA from United States Cellular   
Corporation for approximately $26,100,000 or $139 per Pop. The PA-9 RSA has     
approximately 188,000 Pops and abuts the Company's Ohio Cluster on the South and
McCaw/AT&T's Pittsburgh MSA on the North.                                       

 F-5

424B1
73rd Page of 94
TOC
1st
Previous
Next
Bottom
Just 73rd

PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

MID-ATLANTIC CLUSTER -- (CONTINUED)                                             
    The pro forma unaudited condensed results of operations for the six months
ended June 30, 1996, assuming the above acquisitions were consummated as of the 
beginning of the period, are as follows:                                        

                                                                · Download Table
                                                                     
Revenues.................................................    $48,182 
Net loss.................................................    (14,262)
Net loss per common share................................    $  (.56)

3.  COMMON STOCK                                                              

The Company filed a registration statement with the SEC and is in the 
process of registering for resale 3.6 million outstanding shares of Class A     
Common Stock to the public. The Company requested large and founding            
shareholders to register and sell a portion of their already outstanding but    
privately held stock to increase liquidity of its Class A Common Stock without  
creating dilution. AT&T/McCaw, Robert Price, the Thomas H. Lee Company and the  
Pennsylvania Public School Employes' Retirement System have stated that they    
will not participate in this sale. Aeneas Venture Corporation, Spectrum Equity  
Investors, L.P., Investment Advisors, Inc. and Dominion Cellular have complied  
with the Company's request to create liquidity without dilution and sell a      
portion of these shares.                                                        

 During 1995, the Company's Board of Directors authorized the Company to
purchase up to 750,000 shares of its Common Stock on the open market or in      
private transactions from time to time. To date, the Company has repurchased and
retired 209,062 shares of its Common Stock.                                     

  On February 29, 1996, the Board of Directors authorized a 5-for-4 common
stock split in the form of a twenty-five percent stock dividend payable March   
28, 1996 to shareholders of record March 11, 1996. Stockholders' equity has been
restated to give retroactive recognition to the stock split for all periods     
presented. In addition, references in the financial statements to number of     
shares, per share amounts and market price of the Company's common stock have   
been restated.                                                                  

4.  PENDING TRANSACTIONS                                                      

NEW YORK CLUSTER                                                                

The Company has reached agreement, pursuant to which it will exchange 
certain of its Systems for, among other things, the Orange County, NY MSA and an
additional 11.1% of the Company's majority-owned Poughkeepsie, NY MSA. Pursuant 
to the agreement of the Company will exchange an aggregate of 548,016 Net Pops  
consisting of its OH-9 RSA, a portion of its OH-10 RSA (excluding Perry and     
Hocking counties) and the Parkersburg, WV/Marietta, OH MSA for the Orange       
County, NY MSA (324,323 Pops), 11.1% of the Poughkeepsie, NY MSA (262,663 Pops),
12.2% of the Janesville, WI( MSA (147,650 Pops) and approximately 23,571        
additional net Pops, including small interests in the Eau Claire, WI and Wausau,
WI MSAs (in each of which the Company currently has a majority interest). The   
Orange County, NY MSA abuts the Company's NY-5 RSA to the north, the Company's  
Poughkeepsie, NY MSA to the east and the New York City MSA of McCaw/AT&T        
Wireless to the south and east (bordering Westchester, Putnam and Rockland      
counties). The exchange is subject to, among other things, FCC approval.        

 F-6

424B1
74th Page of 94
TOC
1st
Previous
Next
Bottom
Just 74th

PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4.  PENDING TRANSACTIONS (CONTINUED)                                          

MID-ATLANTIC CLUSTER                                                            

    The Company has contracted to acquire the non-wireline cellular system the
WV-3 RSA which has approximately 269,000 Pops for approximately $35,000,000. The
WV-3 RSA abuts the Company's PA-9 RSA and WV-2 RSA. The acquisition is subject  
to certain conditions including, but not limited to, FCC approval and is        
expected to close in the third quarter.                                         

UPPER MIDWEST CLUSTER                                                           

     In a disputed acquisition on November 14, 1994, RFB Cellular, Inc. signed a
contract to acquire the MI-2 RSA. The Company believed it should have had the   
right to purchase the property and initiated legal proceedings. In May 1995, as 
a result of this litigation, the Court of Chancery of the State of Delaware     
awarded the Company the right to acquire the MI-2 RSA. The defendant in the     
lawsuit appealed the decision. On March 22, 1996, the Delaware Supreme Court    
reversed the lower court's decision and ordered the Company to unwind the       
acquisition and sell the license and operating assets to the defendant. The     
Company believes that the completion of this transaction will not result in any 
material economic gain or loss and the loss of MI-2's operating results will not
be material to the Company's results of operations.                             

5.  SUBSEQUENT EVENT                                                          

    On July 1, 1996, the Company consummated the sale of its recently acquired
AL-4 RSA for approximately $27,500,000 in cash or approximately $200 per Pop.   
The Company acquired this stand-alone RSA in November 1995, for $10,000,000 in  
cash and $10,000,000 in a 5-year, 4% Note that was subsequently converted into  
1,468,860 shares of the Company's Class A Common Stock on the closing date. For 
financial purposes, the sale of the AL-4 RSA will not result in a material gain 
or loss.                                                                        

 F-7

424B1
75th Page of 94
TOC
1st
Previous
Next
Bottom
Just 75th

REPORT OF INDEPENDENT AUDITORS

Board of Directors                                                              
PriCellular Corporation                                                     

    We have audited the consolidated balance sheets of PriCellular Corporation
and subsidiaries as of December 31, 1995 and 1994, and the related consolidated 
statements of operations, stockholders' equity and cash flows for each of the   
three years in the period ended December 31, 1995. These financial statements   
are the responsibility of the Company's management. Our responsibility is to    
express an opinion on these financial statements based on our audits.           

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

 In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
PriCellular Corporation and subsidiaries at December 31, 1995 and 1994, and the 
consolidated results of their operations and their cash flows for each of the   
three years in the period ended December 31, 1995, in conformity with generally 
accepted accounting principles.                                                 

                     ERNST & YOUNG LLP

New York, New York                                                              
January 24, 1996                                                                

 F-8

424B1
76th Page of 94
TOC
1st
Previous
Next
Bottom
Just 76th

PRICELLULAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS 
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA) 

                                                        · Enlarge/Download Table

                                                                             DECEMBER 31      
                                                                        --------------------- 
                                                                          1995         1994   
                                                                        --------     -------- 
                                                                                              
                                    ASSETS                                                    
CURRENT ASSETS:                                                                               
  Cash and cash equivalents............................................ $123,444     $ 45,411 
  Short-term investments...............................................       --          991 
  Accounts receivable (less allowance of $2,076 in 1995 and $735 in                           
     1994).............................................................    8,725        2,653 
  Due from affiliate...................................................       36           -- 
  Inventory............................................................    1,651          428 
  Other current assets.................................................    4,708          276 
                                                                        --------     -------- 
     Total current assets..............................................  138,564       49,759 
                                                                        --------     -------- 
FIXED ASSETS -- AT COST:                                                                      
  Cellular facilities and equipment....................................   56,375       27,148 
  Furniture and equipment..............................................    1,675          535 
                                                                        --------     -------- 
                                                                          58,050       27,683 
  Less accumulated depreciation........................................   (6,009)      (1,539)
                                                                        --------     -------- 
Net fixed assets.......................................................   52,041       26,144 
Investment in cellular operations......................................   37,386        4,581 
Cellular licenses (less accumulated amortization of $3,833 in 1995 and                        
  $1,374 in 1994)......................................................  305,375      122,104 
Cellular licenses held for sale........................................       --        7,463 
Deferred financing costs (less accumulated amortization of $1,029 in                          
  1995 and $57 in 1994)................................................   11,386        4,757 
Other assets...........................................................       14          936 
                                                                        --------     -------- 
          Total assets................................................. $544,766     $215,744 
                                                                        ========     ======== 
                          LIABILITIES AND STOCKHOLDERS' EQUITY                                
CURRENT LIABILITIES:                                                                          
  Accounts payable and accrued expenses................................ $ 15,777     $  9,578 
  Long-term debt -- current portion....................................    1,971        3,249 
  Income taxes payable.................................................      872        3,425 
  Other current liabilities............................................    3,529        7,019 
                                                                        --------     -------- 
     Total current liabilities.........................................   22,149       23,271 
Long-term debt.........................................................  315,216      113,683 
Other long-term liabilities............................................    1,673          554 
Commitments and contingent liabilities                                                        
STOCKHOLDERS' EQUITY:                                                                         
  Preferred Stock $0.01 par:                                                                  
     Series A, cumulative convertible: authorized 10,000,000 shares;                          
      issued and outstanding 96,000 shares (1995) and none in (1994)...        1           -- 
  Common Stock, $0.01 par:                                                                    
     Class A: Authorized 40,000,000 shares; issued and outstanding                            
       10,857,671 shares (1995) and 5,000,000 shares (1994)............      109           50 
     Class B: Authorized 20,000,000 shares; issued and outstanding                            
       13,815,699 shares (1995) and 14,626,089 shares (1994)...........      138          146 
  Additional paid-in capital...........................................  215,680       80,529 
  Accumulated deficit..................................................  (10,200)      (2,489)
                                                                        --------     -------- 
     Total stockholders' equity........................................  205,728       78,236 
                                                                        --------     -------- 
          Total liabilities and stockholders' equity................... $544,766     $215,744 
                                                                        ========     ======== 

See notes to consolidated financial statements. 

 F-9

424B1
77th Page of 94
TOC
1st
Previous
Next
Bottom