CONTEL CELLULAR INC, PREM14C, 1995-01-30

CONTEL CELLULAR INC
PREM14C, 1995-01-30
RADIOTELEPHONE COMMUNICATIONS

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

SCHEDULE 14C INFORMATION

INFORMATION STATEMENT PURSUANT TO
SECTION 14(C) OF THE SECURITIES EXCHANGE ACT OF 1934

CHECK THE APPROPRIATE BOX:

/X/ PRELIMINARY INFORMATION STATEMENT
/ / DEFINITIVE INFORMATION STATEMENT

CONTEL CELLULAR INC.
(NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

CONTEL CELLULAR INC.
(NAME OF PERSON FILING THE INFORMATION STATEMENT)

PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/ / $125 PER EXCHANGE ACT RULE 0-11(C)(1)(II), OR 14C-5(G).
/X/ FEE COMPUTED ON TABLE BELOW PER EXCHANGE ACT RULES 14C-5(G) AND 0-11.

<TABLE>
<CAPTION>
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TITLE OF EACH PER UNIT PRICE OR OTHER
CLASS OF SECURITIES AGGREGATE NUMBER OF UNDERLYING VALUE OF TRANSACTION PROPOSED MAXIMUM
TO WHICH SECURITIES TO WHICH COMPUTED PURSUANT TO AGGREGATE VALUE AMOUNT OF
TRANSACTION APPLIES TRANSACTION APPLIES EXCHANGE ACT RULE 0-11 OF TRANSACTION FILING FEE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock, par
value $1.00 per share....... 9,970,953 $25.50 $254,259,301.50 $50,851.86
=====================================================================================================================
</TABLE>

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

<TABLE>
<S> <C>
Amount Previously Paid: Filing Party:
Form, Schedule or Registration
Statement No.: Date Filed:
</TABLE>
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<PAGE> 2

INFORMATION STATEMENT
------------------------

CONCERNING THE MERGER OF

CONTEL CELLULAR ACQUISITION CORPORATION,
A SUBSIDIARY OF CONTEL CORPORATION,

WITH AND INTO

CONTEL CELLULAR INC.,
AT A PRICE OF $25.50 PER CLASS A SHARE
------------------------

WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.
------------------------

This Information Statement is being furnished to the holders of outstanding
shares of the Class A Common Stock (the "Class A Stockholders") of Contel
Cellular Inc., a Delaware corporation (the "Company"), as of the Record Date (as
defined below) in connection with the proposed merger (the "Merger") of Contel
Cellular Acquisition Corporation, a Delaware corporation ("CCI Acquisition"),
with and into the Company. The Company will be the corporation that survives the
Merger (the "Surviving Corporation"). The Merger will be effected pursuant to an
Agreement and Plan of Merger dated as of December 27, 1994, as amended (the
"Merger Agreement"), among the Company, GTE Corporation, a New York corporation
("GTE"), Contel Corporation, a Delaware corporation in liquidation and a wholly
owned subsidiary of GTE ("Contel"), and CCI Acquisition, which is a wholly owned
subsidiary of Contel. In the Merger, (i) each outstanding share of the Class A
Common Stock, par value $1.00 per share, of the Company (a "Class A Share")
(other than Class A Shares as to which appraisal rights have been properly
exercised under the General Corporation Law of the State of Delaware (the
"DGCL")) will be converted into the right to receive $25.50 in cash, without
interest, subject to applicable back-up withholding taxes (the "Merger
Consideration"), (ii) each Class A Share held by the Company and each
outstanding share of the common stock of CCI Acquisition will be cancelled, and
no payment will be made with respect thereto and (iii) each outstanding share of
the Class B Common Stock, par value $1.00 per share, of the Company (a "Class B
Share") will be converted into one newly issued share of the Class B common
stock of the Surviving Corporation. After the effective date of the Merger, the
Class A Shares will cease to be quoted on the Nasdaq National Market.

YOU ARE URGED TO REVIEW THIS INFORMATION STATEMENT CAREFULLY TO DECIDE
WHETHER TO ACCEPT THE MERGER CONSIDERATION OR TO EXERCISE APPRAISAL RIGHTS
PURSUANT TO THE DGCL. IF YOU WISH TO ACCEPT THE MERGER CONSIDERATION, PLEASE
COMPLETE, EXECUTE AND SEND THE ENCLOSED LETTER OF TRANSMITTAL, TOGETHER WITH
CERTIFICATES REPRESENTING YOUR CLASS A SHARES, TO CHEMICAL BANK, AS DISBURSING
AGENT FOR THE MERGER (THE "DISBURSING AGENT"), IN ACCORDANCE WITH THE
INSTRUCTIONS SET FORTH IN THE LETTER OF TRANSMITTAL. IF YOU WISH TO EXERCISE
APPRAISAL RIGHTS PURSUANT TO THE DGCL, YOU MUST, WITHIN 20 DAYS OF THE DATE OF
THIS INFORMATION STATEMENT, DELIVER TO THE COMPANY A WRITTEN DEMAND FOR A
JUDICIAL APPRAISAL OF THE FAIR VALUE OF YOUR CLASS A SHARES AND OTHERWISE COMPLY
WITH THE APPLICABLE PROVISIONS OF THE DGCL. SEE "DISSENTERS' RIGHTS OF
APPRAISAL" AND THE TEXT OF SECTION 262 OF THE DGCL ATTACHED AS EXHIBIT D TO THIS
INFORMATION STATEMENT.

The record date for stockholders entitled to notice of or entitled to give
consent to the Merger was February , 1995 (the "Record Date"). As of the
Record Date there were issued and outstanding 9,970,953 Class A Shares and
90,000,000 Class B Shares. Each Class A Share is entitled to one vote per share
and each Class B Share is entitled to five votes per share. On the Record Date,
Contel owned 90,000,000 Class B Shares, which accounted for approximately 98% of
the combined voting power of the outstanding Class A Shares and Class B Shares.
Pursuant to the DGCL, Contel, as the owner of more than 50% of the combined
voting power of the Class A Shares and Class B Shares, approved the Merger by
written consent on February , 1995. Other than such written consent, no
further action by the stockholders of the Company is necessary to approve or
consummate the Merger and no such approval will be sought. The Company will not
hold a meeting of the stockholders of the Company in connection with the Merger.
The Merger will be consummated on March , 1995.

This Information Statement is being mailed on or about February , 1995 to
Class A Stockholders of record on the Record Date, and constitutes the notice of
appraisal rights required by Section 262 of the DGCL and the notice of corporate
action without meeting required by Section 228(d) of the DGCL.

The principal executive offices of the Company are located at 245 Perimeter
Center Parkway, Atlanta, Georgia 30346 and its telephone number is (404)
804-3400.

THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF
SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED
IN THIS INFORMATION STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
THE DISBURSING AGENT FOR THE MERGER IS:
CHEMICAL BANK
The date of this Information Statement is February , 1995
<PAGE> 3

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
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<S> <C>
SUMMARY.............................................................................. 4
SPECIAL FACTORS...................................................................... 10
Introduction; The Merger........................................................... 10
Background of the Merger........................................................... 10
Determination of the Special Committee; Fairness of the Merger..................... 11
Opinion of Financial Advisor to the Special Committee.............................. 12
Opinions of Financial Advisors to GTE.............................................. 16
Written Consent; Purpose of the Merger; Plans for the Company...................... 21
Regulatory Requirements............................................................ 22
Merger Consideration............................................................... 22
Accounting Treatment of the Merger................................................. 22
Certain Federal Income Tax Consequences of the Merger.............................. 22
Certain Effects of the Merger...................................................... 23
THE MERGER AGREEMENT................................................................. 24
General............................................................................ 24
Designation of Directors; Certificate of Incorporation and By-laws................. 24
Representations and Warranties..................................................... 24
Indemnification and Other Covenants................................................ 24
Conditions to the Merger........................................................... 25
Termination........................................................................ 25
Amendment.......................................................................... 25
Extension; Waiver.................................................................. 25
PAYMENT OF THE MERGER CONSIDERATION.................................................. 26
DISSENTERS' RIGHTS OF APPRAISAL...................................................... 27
MARKET PRICES AND DIVIDENDS ON THE COMMON STOCK
OF THE COMPANY..................................................................... 29
SELECTED CONSOLIDATED FINANCIAL DATA OF THE COMPANY.................................. 30
PROJECTED CONSOLIDATED FINANCIAL DATA OF THE COMPANY................................. 31
BUSINESS OF THE COMPANY.............................................................. 33
Overview........................................................................... 33
Cellular Interests................................................................. 33
The Cellular Telephone Industry.................................................... 36
The Company's Cellular Operations.................................................. 37
Non-Controlled Systems............................................................. 41
International Interests............................................................ 41
Competition........................................................................ 41
Regulation......................................................................... 42
RELATED PARTY TRANSACTIONS........................................................... 43
Arrangements and Transactions with Contel and GTE.................................. 43
Payments to Optionholders.......................................................... 45
Relationship between GTE Director and PaineWebber.................................. 45
Transition Arrangements............................................................ 45
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT......................................................................... 47
Certain Beneficial Owners.......................................................... 47
Directors and Executive Officers of the Company.................................... 48
Directors and Executive Officers of GTE, Contel and CCI Acquisition................ 49
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE...................................... 50
</TABLE>

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<TABLE>
<CAPTION>
PAGE
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<S> <C>
EXHIBIT A -- AGREEMENT AND PLAN OF MERGER........................................... A-1
EXHIBIT B -- OPINION OF LAZARD FRERES & CO.......................................... B-1
EXHIBIT C-1 -- OPINION OF MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED...................................................... C-1-1
EXHIBIT C-2 -- OPINION OF PAINEWEBBER INCORPORATED................................... C-2-1
EXHIBIT D -- DELAWARE GENERAL CORPORATION LAW SECTION 262........................... D-1
EXHIBIT E -- DIRECTORS AND EXECUTIVE OFFICERS OF GTE CORPORATION, CONTEL
CORPORATION, CONTEL CELLULAR ACQUISITION CORPORATION AND CONTEL
CELLULAR INC........................................................... E-1
EXHIBIT F -- REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS............................... F-1
</TABLE>

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<PAGE> 5

SUMMARY

The following is a summary of certain information contained elsewhere in
this Information Statement. This Summary does not purport to be complete and is
qualified in its entirety by the more detailed information contained elsewhere
in this Information Statement and the Exhibits hereto. Unless defined in this
Summary, capitalized terms used herein have the meanings ascribed to them
elsewhere in this Information Statement. STOCKHOLDERS ARE URGED TO READ THIS
INFORMATION STATEMENT AND THE EXHIBITS HERETO IN THEIR ENTIRETY IN ORDER TO
DECIDE WHETHER TO ACCEPT THE MERGER CONSIDERATION OR TO EXERCISE APPRAISAL
RIGHTS PURSUANT TO THE DGCL. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY.

SPECIAL FACTORS

Introduction; The Merger. This Information Statement is being furnished to
the holders of outstanding shares of the Class A Common Stock (the "Class A
Stockholders") of Contel Cellular Inc., a Delaware corporation (the "Company"),
in connection with the proposed merger (the "Merger") of Contel Cellular
Acquisition Corporation, a Delaware corporation ("CCI Acquisition"), with and
into the Company. The Company will be the corporation that survives the Merger
(the "Surviving Corporation"). The Merger will be effected pursuant to an
Agreement and Plan of Merger dated as of December 27, 1994, as amended (the
"Merger Agreement"), among the Company, GTE Corporation, a New York corporation
("GTE"), Contel Corporation, a Delaware corporation in liquidation and a wholly
owned subsidiary of GTE ("Contel"), and CCI Acquisition, which is a wholly owned
subsidiary of Contel. Certain additional information relating to GTE, Contel,
CCI Acquisition and the Company and each of their respective directors and
executive officers is included in Exhibit E to this Information Statement.

In the Merger, (i) each outstanding share of the Class A Common Stock of
the Company, par value $1.00 per share (each a "Class A Share") (other than
Class A Shares as to which appraisal rights have been properly exercised under
the DGCL), will be converted into the right to receive $25.50 in cash, without
interest, subject to back-up withholding taxes (the "Merger Consideration"),
(ii) each Class A Share held by the Company and each outstanding share of the
common stock of CCI Acquisition will be cancelled, and no payment will be made
with respect thereto and (iii) each outstanding share of the Class B Common
Stock of the Company, par value $1.00 per share (each a "Class B Share"), will
be converted into one newly issued share of the Class B common stock of the
Surviving Corporation.

The Merger is subject to the satisfaction of certain conditions. See "THE
MERGER AGREEMENT -- Conditions to the Merger". Assuming the satisfaction of such
conditions, the Merger will be consummated on March , 1995.

Background of the Merger. GTE, through its wholly-owned subsidiary Contel,
owns all of the outstanding Class B Shares of the Company, which constitute 90%
of the Company's outstanding common stock and approximately 98% of the combined
voting power of the capital stock of the Company. The outstanding Class A
Shares, which constitute 10% of the Company's outstanding common stock and
approximately 2% of the combined voting power of the capital stock of the
Company, are held by the public. GTE believes that the cellular communications
businesses conducted by the Company and another wholly owned subsidiary of GTE,
GTE Mobilnet Incorporated ("GTE Mobilnet"), can be conducted more effectively by
consolidating the operations and acquiring the outstanding minority interest in
the Company. GTE's decision is based on its belief that such consolidation will
permit GTE to implement a unified marketing strategy for its cellular
operations, provide increased flexibility in pursuing future opportunities,
generate efficiencies in the combined cellular communications business and
eliminate the complexities of operating two cellular businesses with overlapping
but not identical ownership. GTE believes that the most efficient way to effect
the acquisition of the shares held by the public and to provide Class A
Stockholders with cash for their Class A Shares is through the merger of a
wholly-owned subsidiary of Contel into the Company. Nine of the Company's twelve
directors are currently executive officers or directors of GTE or the Company.
Accordingly, the Board of Directors of the Company (the "Board") appointed a
special committee of the three independent directors (the "Special Committee")
to negotiate the Merger on behalf of Class A Stockholders and make a
recommendation to the Board of Directors in connection with the transaction.

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<PAGE> 6

Record Date; No Action Required by Class A Stockholders to Consummate the
Merger. The Record Date for stockholders entitled to notice of or entitled to
give consent to the Merger was February , 1995. As of the Record Date, there
were issued and outstanding 9,970,953 Class A Shares, each of which has one vote
per share, and 90,000,000 Class B Shares, each of which has five votes per
share. On the Record Date, Contel owned 90,000,000 Class B Shares, which
accounted for approximately 98% of the combined voting power of the outstanding
Class A Shares and Class B Shares. Pursuant to the DGCL, Contel, as holder of
record of more than 50% of the combined voting power of the Class A and Class B
Shares, approved the Merger by written consent on February , 1995. Under the
DGCL, no action on the part of any other stockholder of the Company is necessary
to authorize or to consummate the Merger. The Company will not hold a meeting of
stockholders in connection with the Merger.

Determination of the Special Committee and the Board. On December 27,
1994, the Special Committee concluded that the offer price of $25.50 per Class A
Share was fair to the Class A Stockholders and recommended that the Board of
Directors approve the Merger and the Merger Agreement. Based on the
recommendation of the Special Committee, the Board unanimously approved the
Merger and the Merger Agreement. For a discussion of the factors the Special
Committee considered in reaching its decision, see "SPECIAL
FACTORS -- Determination of the Special Committee; Fairness of the Merger".

Opinion of Financial Advisor to the Special Committee. At the December 22
Special Committee Meeting, Lazard Freres & Co. ("Lazard Freres"), financial
advisor to the Special Committee, informed the Special Committee that it would
be prepared to deliver a written opinion to the effect that the proposed price
of $25.50 per outstanding Class A Share to be received by the Class A
Stockholders in the Merger would be fair to such holders from a financial point
of view. Subsequently, on December 30, 1994, Lazard Freres delivered its written
opinion to the Special Committee that, as of such date, the consideration to be
received by the holders of the outstanding Class A Shares in the Merger is fair
to such holders from a financial point of view. A copy of such written opinion,
setting forth the assumptions made, matters considered and the review
undertaken, is attached to this Information Statement as Exhibit B. Class A
Stockholders are urged to read this opinion in its entirety. No limitations were
imposed by the Special Committee upon Lazard Freres with respect to the
investigation made or the procedures followed by Lazard Freres in rendering its
opinion. For a discussion of the matters Lazard Freres considered in reaching
its opinion, see "SPECIAL FACTORS -- Opinion of Financial Advisor to the Special
Committee".

Opinions of Financial Advisors to GTE. GTE retained Merrill Lynch, Pierce,
Fenner & Smith Incorporated and PaineWebber Incorporated (the "GTE Financial
Advisors") in connection with the transaction. The GTE Financial Advisors
assisted GTE in its negotiations with the Special Committee and Lazard Freres.
In connection with the transaction, the GTE Financial Advisors rendered opinions
to GTE to the effect that the price to be paid for the Class A Shares in the
Merger is fair to GTE from a financial point of view. A copy of the fairness
opinions of the GTE Financial Advisors setting forth the assumptions made,
matters considered and review undertaken, are attached to this information
statement as Exhibits C-1 and C-2 and incorporated herein by reference. For a
discussion of the matters the GTE Financial Advisors considered in reaching
their respective opinions, see "SPECIAL FACTORS -- Opinions of Financial
Advisors to GTE".

PAYMENT OF THE MERGER CONSIDERATION

CCI Acquisition will make available to Chemical Bank, as disbursing agent
in connection with the Merger (the "Disbursing Agent"), the aggregate amount of
cash to be paid in respect of the Class A Shares pursuant to the Merger. In
order to receive the Merger Consideration, Class A Stockholders must send their
certificates representing Class A Shares to the Disbursing Agent along with a
Letter of Transmittal. All certificates so surrendered will be cancelled. A
Letter of Transmittal setting forth the procedures for surrendering to the
Disbursing Agent certificates representing Class A Shares in exchange for cash
is enclosed with this Information Statement.

Upon surrender of a certificate representing Class A Shares together with a
duly executed Letter of Transmittal, the Class A Stockholder will receive in
exchange for each Class A Share $25.50 in cash, without

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interest, subject to applicable back-up withholding taxes. Any cash held by the
Disbursing Agent that remains unclaimed by stockholders for 180 days after the
effective time of the Merger will be paid out to the Surviving Corporation.
After that time, Class A Stockholders may look only to the Surviving Corporation
for payment of the Merger Consideration without interest and subject to
applicable abandoned property, escheat and other similar laws.

ALL QUESTIONS AND REQUESTS FOR INFORMATION RELATING TO THE PROCEDURE FOR
PAYMENT OF THE MERGER CONSIDERATION FOR THE CLASS A SHARES SHOULD BE DIRECTED TO
THE DISBURSING AGENT. SEE "PAYMENT OF THE MERGER CONSIDERATION".

DISSENTERS' RIGHTS OF APPRAISAL

By following the procedures prescribed by the DGCL, Class A Stockholders
have the right to dissent from the Merger and to receive cash equal to the fair
value of their Class A Shares as determined pursuant to appraisal proceedings in
the Delaware courts. A WRITTEN DEMAND FOR APPRAISAL OF CLASS A SHARES MUST BE
DELIVERED TO THE GENERAL COUNSEL OF THE COMPANY WITHIN 20 DAYS AFTER THE DATE OF
THIS INFORMATION STATEMENT. Because of the complexity of the procedures for
exercising the right to dissent, the Company believes that Class A Stockholders
who consider exercising such right should seek the advice of counsel. Failure to
take any step in connection with the exercise of dissenters' right of appraisal
may result in the termination or waiver of such rights. See "DISSENTERS' RIGHTS
OF APPRAISAL" and Exhibit D.

MARKET PRICES AND DIVIDENDS ON THE COMMON STOCK OF THE COMPANY

The Class A Shares are publicly traded in the over the counter market and
quoted on the Nasdaq National Market under the symbol "CCXLA". There is no
established trading market for the Class B Shares. The Company has not paid any
dividends on its Class A Shares or Class B Shares and does not anticipate that
it will do so in the foreseeable future.

The following table indicates the high and low sales prices for the Class A
Shares during the designated periods:

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
------- ------- ------- -------
<S> <C> <C> <C> <C>
1994
High.......................... $ 18.75 $ 17.25 $ 24.00 $ 25.25
Low........................... 14.00 13.00 16.00 23.50

1993
High.......................... $ 18.63 $ 16.25 $ 18.75 $ 22.00
Low........................... 13.25 13.50 15.50 15.00

1992
High.......................... $ 23.25 $ 18.50 $ 16.50 $ 19.00
Low........................... 17.25 13.00 13.50 13.25
</TABLE>

On September 7, 1994, the last full day of trading prior to the
announcement of GTE's intention to acquire the Class A Shares, the high, low and
closing sales prices per Class A Share quoted on the Nasdaq National Market were
$18.25, $17.75 and $17.75, respectively.

BUSINESS OF THE COMPANY

The Company, through its subsidiaries and through partnerships, provides or
participates in the provision of cellular telephone service in various
metropolitan statistical areas ("MSAs") and rural service areas ("RSAs")
throughout the United States. As of December 31, 1994, the Company had interests
in cellular telephone systems in the United States representing approximately
23.9 million "POPs". ("POPs" refer to the population of a market area multiplied
by the Company's percentage ownership in the cellular system serving that
market).

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The Company's 23.9 million POPs include cellular systems which the Company
controls or manages and cellular systems operated by partnerships in which the
Company is not the controlling partner. As of December 31, 1994, approximately
19.5 million of the Company's 23.9 million POPs were located in 59 MSAs. The
Company owned a controlling interest in and/or managed cellular systems
servicing 32 of these 59 MSAs (representing approximately 69% of the Company's
MSA POPs). The Company owned a non-controlling interest in cellular systems
servicing the remaining 27 MSAs.

The remaining 4.4 million of the Company's 23.9 million POPs were located
in 52 RSAs. As of December 31, 1994, the Company owned controlling interests in
entities licensed to provide cellular service in 24 RSAs, owned non-controlling
interests in and managed 10 RSA markets and held non-controlling interests in 18
RSAs. Most of the Company's RSA POPs are in areas adjacent to MSAs currently
served by the Company. See "BUSINESS OF THE COMPANY".

RELATED PARTY TRANSACTIONS

The Company, Contel and GTE have a number of financial, operating and other
arrangements believed to be of mutual benefit. Those arrangements include,
without limitation, a Third Restated Competition Agreement dated March 14, 1991
among Contel, GTE and the Company (the "Competition Agreement") which, among
other things, allocates cellular business opportunities among GTE's cellular
businesses and a Services Agreement dated May 1, 1991, as amended, between GTE
Mobile Communications Service Corporation ("GTE Mobile") and the Company (the
"Services Agreement"). The terms of these arrangements have been established by
Contel and GTE in consultation with the Company but are not the result of
arms-length negotiations. See "RELATED PARTY TRANSACTIONS -- Arrangements and
Transactions with Contel and GTE".

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SELECTED CONSOLIDATED FINANCIAL DATA OF THE COMPANY

<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30,
YEARS ENDED DECEMBER 31,
------------------------------------------------------------ ------------------------
1989 1990 1991 1992 1993 1993 1994
-------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues and sales.................... $ 65,519 $ 167,178 $ 235,107 $ 286,999 $ 374,014 $ 265,262 $ 405,069
Operating income
(loss)(1)........................... (14,682) (38,143) (68,577) (50,113) (28,305) (12,536) 35,262
Loss from consolidated operations..... (12,328) (158,865) (223,726) (196,347) (188,011) (136,253) (101,794)
Equity in earnings of unconsolidated
partnerships........................ 17,539 19,069 15,687 29,027 37,351 27,864 48,510
Gains on sales of partnership
interests........................... -- -- 18,387 60,806 48,023 8,326 76,348
Net income (loss) before cumulative
effect of change in accounting
principles.......................... 2,621 (102,794) (118,900) (73,061) (74,918) (70,382) 6,360
Cumulative effect of change in
accounting principles(2)............ -- -- -- (2,080) (241) -- --
Net income (loss)..................... 2,621 (102,794) (118,900) (75,141) (75,159) (70,382) 6,360
Net income (loss) per share before
cumulative effect of change in
accounting principles............... 0.03 (1.03) (1.19) (0.73) (0.75) (0.70) 0.06
Net income (loss) per
share............................... 0.03 (1.03) (1.19) (0.75) (0.75) (0.70) 0.06
Weighted average shares outstanding
(in thousands)...................... 99,983 99,931 99,942 99,947 99,949 99,949 99,951
OTHER OPERATING DATA:
Capital expenditures.................. 31,871 70,841 107,792 183,504 130,042 81,377 139,345
Ending subscribers.................... 50,050 155,285 236,282 327,645 521,226 434,338 672,560
</TABLE>

<TABLE>
<CAPTION>
AS OF
AS OF DECEMBER 31, SEPTEMBER 30,
------------------------------------------------------------ ------------------------
1989 1990 1991 1992 1993 1993 1994
-------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets.......................... $207,186 $1,665,395 $1,870,669 $1,930,469 $2,052,984 $1,979,987 $2,175,701
Long-term obligations:
Notes payable --
affiliates........................ -- 1,540,000 1,735,034 1,814,327 1,901,726 1,906,191 2,011,613
Other............................... 14,280 14,280 42,280 36,280 36,792 30,280 30,792
Stockholders' equity
(deficit)........................... 130,166 27,525 (91,085) (166,084) (241,221) (236,444) (234,820)
Book value per share.................. 1.30 0.28 (0.91) (1.66) (2.41) (2.37) (2.35)
</TABLE>

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

(1) The operating loss in 1991 includes approximately $12 million of integration
costs associated with the merger of Contel with a wholly owned subsidiary of
GTE.

(2) In 1993, the Company adopted Statement of Financial Accounting Standards No.
112, "Employers' Accounting for Postemployment Benefits." In 1992, the
Company adopted Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions" and
No. 109, "Accounting for Income Taxes."

Earnings were not adequate to cover fixed charges in 1991, 1992, 1993 or
for the nine months ended September 30, 1993 and 1994. The amount of such
deficiency was $203 million, $128 million and $129 million for the years ended
December 31, 1991, 1992 and 1993, respectively, and $126 million and $6 million
for the nine months ended September 30, 1993 and 1994, respectively.

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PROJECTED CONSOLIDATED FINANCIAL DATA OF THE COMPANY

The Company does not, as a matter of course, publicly disclose projections
as to future revenues or earnings. As part of its normal planning process, the
Company has prepared certain five year projected financial data for internal
purposes. Additionally, the Company prepared ten year projected financial data
which was based on an earlier version of the five year projected financial data.
Differences between the ten and the five year projected data are attributable to
the inclusion or exclusion of certain acquisitions which occurred subsequent to
the preparation of the ten year projected data. These five year and ten year
financial projections have been included in this Information Statement because
such projections were made available to the Special Committee, its financial
advisor and the GTE Financial Advisors. See "PROJECTED CONSOLIDATED FINANCIAL
DATA OF THE COMPANY". There can be no assurance that the projections will be
realized and actual results may vary materially from the projections.

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<PAGE> 11

SPECIAL FACTORS

INTRODUCTION; THE MERGER

In the Merger, (i) each outstanding Class A Share (other than Class A
Shares as to which appraisal rights have been properly exercised under the DGCL)
will be converted into the right to receive $25.50 in cash, without interest,
subject to backup withholding (the "Merger Consideration"), (ii) each Class A
Share held by the Company and each outstanding share of the common stock of CCI
Acquisition will be cancelled, and no payment will be made with respect thereto
and (iii) each outstanding Class B Share will be converted into one newly issued
share of the Class B common stock of the Surviving Corporation.

BACKGROUND OF THE MERGER

The outstanding stock of the Company consists of 9,970,953 Class A Shares,
which represent approximately 2% of the voting power of the combined capital
stock of the Company, and 90,000,000 Class B Shares, which represent
approximately 98% of the voting power of the combined capital stock of the
Company. GTE, through its wholly owned subsidiary Contel, owns all of the
outstanding Class B Shares. The outstanding Class A Shares are held by the
public and trade in the over the counter market with prices quoted on the NASDAQ
National Market under the symbol "CCXLA".

The Company was originally formed as a wholly owned subsidiary of Contel.
In April 1988, a portion of the Company's stock was sold to the public in a
public offering. In March 1991, a wholly owned subsidiary of GTE merged into
Contel and Contel became a wholly-owned subsidiary of GTE. As a result of this
merger, the Company became an indirectly held subsidiary of GTE. GTE also
provided and continues to provide cellular mobile services through another
wholly-owned subsidiary, GTE Mobilnet. Since the date of that merger, the
concept of acquiring the publicly held shares of the Company was discussed from
time to time on a limited and confidential basis but no decision was made to
proceed. In early 1994, GTE began seriously to consider acquiring the publicly
held shares of the Company.

In early August 1994, GTE management concluded that it would be advisable
to proceed to acquire the publicly held shares of the Company. GTE's decision
was based on its belief that eliminating the minority interest and consolidating
its cellular mobile services businesses would permit GTE to implement a unified
marketing strategy for its cellular operations, provide increased flexibility in
pursuing future opportunities, generate efficiencies in the combined cellular
communications business and eliminate the complexities of operating two cellular
businesses with overlapping but not identical ownership.

GTE met with its legal and financial advisors to discuss structuring the
transaction. GTE decided that the most efficient way to effect the acquisition
of the public minority would be through a merger of a wholly owned subsidiary of
Contel into the Company. On September 8, 1994, the Board of Directors of GTE
approved the proposal to acquire the Class A Shares for $22.50 per share and
also authorized negotiations with

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<PAGE> 12

the Company. On the same date, GTE notified the Board of Directors of the
Company of its proposal to acquire the Class A Shares for $22.50 per Class A
Share, or approximately $224 million.

Following the public announcement on September 8, 1994, four class action
lawsuits were brought on behalf of the Class A Stockholders of the Company
alleging that the announced purchase price of $22.50 per Class A Share was
inadequate. Counsel for GTE, Contel and CCI Acquisition subsequently began
discussions with plaintiffs' counsel regarding the stockholder lawsuits and
invited plaintiffs' counsel to review financial information and meet with the
Special Committee and its financial advisors. On December 23, 1994 a tentative
settlement agreement was reached with plaintiffs, subject to confirmatory
discovery. The tentative settlement approved an increased price of $25.50 per
Class A Share and the payment of certain plaintiffs' counsel fees.

Nine of the Company's twelve directors are currently executive officers or
directors of GTE or the Company. Accordingly, the Board of Directors of the
Company at a meeting on September 9, 1994 appointed the three independent
directors to a special committee (the "Special Committee") to review the
fairness of and negotiate the material terms of the proposed Merger on behalf of
the Class A Stockholders. Members of the Special Committee each received a fee
of $35,000 and the Chairman of the Special Committee received a fee of $45,000.
The Special Committee met for the first time on September 17, 1994 and
authorized the retention of Cahill Gordon & Reindel ("Cahill") as legal counsel
to the Special Committee.

On September 17 and September 22, 1994, the Special Committee interviewed
seven investment banking firms for possible engagement as a financial advisor to
the Special Committee in its evaluation of the proposed Merger. On September 22,
1994, the Special Committee retained Lazard Freres & Co. ("Lazard Freres") as
its financial advisor. Lazard Freres has not had any material relationship with
GTE or any of its subsidiaries including the Company.

Between September 28 and December 22, 1994, the Special Committee and
Lazard Freres held thirteen meetings either in person or by telephone conference
call to discuss the proposed Merger. Beginning on October 17, 1994, the Special
Committee (acting through Lazard Freres) entered into negotiations with GTE's
financial advisors, Merrill Lynch, Pierce, Fenner & Smith Incorporated and
PaineWebber Incorporated (individually, "Merrill Lynch" and "PaineWebber",
respectively, and, collectively, the "GTE Financial Advisors") relating to the
proposed price to be paid in the Merger, which process continued for several
weeks. During the course of such negotiations in October 1994, the GTE Financial
Advisors furnished to GTE's management and to Lazard Freres a preliminary draft
of their background analysis. A final version of such preliminary draft
background analysis was never furnished to GTE or Lazard Freres by the GTE
Financial Advisors. The GTE Financial Advisors based their fairness opinions to
GTE on the analyses described below in "SPECIAL FACTORS -- Opinions of Financial
Advisors to GTE". In November 1994, GTE indicated that it might be willing to
increase its offer to $25.00 per Class A Share. As a result of continued
negotiations between Lazard Freres and the GTE Financial Advisors, and
negotiations with counsel for certain stockholders who brought suit against the
Company and certain of its affiliates in connection with the proposed
transaction, the price per Class A Share proposed to be given in the Merger was
increased by GTE to $25.50.

DETERMINATION OF THE SPECIAL COMMITTEE; FAIRNESS OF THE MERGER

At a meeting on December 22, 1994 (the "December 22 Special Committee
Meeting"), Lazard Freres informed the Special Committee that it would be
prepared to deliver a written opinion to the effect that the proposed price of
$25.50 per Class A Share to be received by the holders of the Class A Shares
(other than GTE, Contel or any of their affiliates) in the Merger would be fair
to such holders from a financial point of view. Subsequently, on December 30,
1994, Lazard Freres delivered its written opinion to the Special Committee that,
as of such date, the consideration to be received by the holders of the Class A
Shares (other than GTE, Contel or any of their affiliates) in the Merger is fair
to such holders from a financial point of view. On December 22, 1994 the Special
Committee reviewed a draft of the Merger Agreement, pursuant to which (i) each
outstanding Class A Share (other than Class A Shares as to which appraisal
rights have been properly exercised under the DGCL) would be converted into the
right to receive the Merger Consideration, (ii) each Class A Share held by the
Company and each outstanding share of the common stock of CCI

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<PAGE> 13

Acquisition would be cancelled, and no payment would be made with respect
thereto and (iii) each outstanding Class B Share would be converted into one
newly issued share of the Class B common stock of the Surviving Corporation. At
a meeting held on December 27, 1994, the Special Committee unanimously
recommended to the Board of Directors of the Company that it approve the Merger
at a price of $25.50 per Class A Share. Based on the recommendation of the
Special Committee, the Company's Board of Directors unanimously approved the
Merger at a price of $25.50 per Class A Share and the Merger Agreement.

In determining to recommend to the Board of Directors of the Company that
it approve the Merger and the Merger Agreement, the Special Committee considered
a number of factors, including but not limited to:

(a) the terms and conditions of the Merger, including the $25.50 per
Class A Share cash consideration offered to Class A Stockholders;

(b) the Company's historical and recent financial condition, results
of operations, business, assets and liabilities and the Special Committee's
and management's evaluation of the Company's business, properties and
future prospects;

(c) that the price of $25.50 per Class A Share represents (i) a
premium of 43.7% over the closing sales price of the Class A Shares on the
Nasdaq National Market on September 7, 1994 the last trading day prior to
the public announcement of the proposed Merger, (ii) a premium of 37.8%
over the closing sales price of the Class A Shares on the Nasdaq National
Market one week prior to September 8, 1994, and (iii) a premium of 39.7%
over the closing sales price of the Class A Shares on the Nasdaq National
Market one month prior to September 8, 1994;

(d) that the sales price of the Class A Shares on the Nasdaq National
Market had not exceeded the price of $25.50 per Class A Share since October
10, 1989;

(e) presentations by Lazard Freres regarding the financial condition,
results of operations, business and prospects of the Company, including the
possible dislocation and competitive uncertainty that could result from
major changes in the cellular communication industry;

(f) presentations by Lazard Freres regarding the industry in which the
Company operates and the financial, operating and stock price history of
the Company in comparison to certain companies operating in the Company's
industry, including the Company's competitors;

(g) statements by Lazard Freres at the December 22 Special Committee
Meeting that it would be prepared to deliver a written opinion to the
effect that the price of $25.50 per Class A Share was fair to the Class A
Stockholders (other than GTE, Contel or any of their affiliates) from a
financial point of view, which written opinion dated December 30, 1994 was
in fact delivered by Lazard Freres; and

(h) the Special Committee's belief that GTE would not increase the
price above $25.50 per Class A Share.

In view of the variety and nature of the factors considered by the Special
Committee, the Special Committee did not attempt to assign relative weights to
the specific factors considered in reaching its determination, except that the
Special Committee placed particular emphasis on the opinion of Lazard Freres and
the fact that the price of $25.50 per Class A Share represented a substantial
premium over the price at which the Class A Shares had recently and historically
traded.

OPINION OF FINANCIAL ADVISOR TO THE SPECIAL COMMITTEE

General. Lazard Freres delivered its written opinion to the Special
Committee that, as of December 30, 1994, the consideration to be received by the
holders of the outstanding Class A Shares in the Merger is fair to such holders
from a financial point of view.

The full text of the written opinion of Lazard Freres, dated December 30,
1994, which sets forth the assumptions made, matters considered and the review
undertaken with regard to such opinion, is attached to this Information
Statement as Exhibit B. Lazard Freres' opinion was delivered for the benefit of
the Special Committee and is not on behalf of, and is not intended to confer
rights or remedies upon any stockholders of

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<PAGE> 14

the Company, GTE, or any other person. The summary of the opinion of Lazard
Freres set forth below is qualified in its entirety by reference to the full
text of the opinion. Class A Stockholders are urged to read this opinion in its
entirety. Additional copies of such opinion are available for inspection and
copying at the principal executive offices of GTE during regular business hours
and are also available upon request directed to GTE Corporation, One Stamford
Forum, Stamford, CT 06904, Attention: Ronald J. Tuccillo, Assistant Secretary.

In rendering its opinion, Lazard Freres, among other things, (i) reviewed
the terms and conditions of a draft of the Merger Agreement (the "Draft Merger
Agreement"); (ii) analyzed certain historical business and financial information
relating to the Company, including the Annual Report to Stockholders and Annual
Reports on Form 10-K of the Company for each of the fiscal years ended December
31, 1991 through 1993, and Quarterly Reports on Form 10-Q of the Company for the
quarters ended March 31, June 30 and September 30, 1994; (iii) reviewed certain
financial forecasts and other data provided by the Company relating to the
Company; (iv) held discussions with members of the senior managements of the
Company and GTE with respect to the businesses and prospects of the Company and
its strategic objectives; (v) reviewed public information with respect to
certain other companies in lines of business Lazard Freres believes to be
generally comparable to the businesses of the Company; (vi) reviewed the
financial terms of certain recent business combinations involving companies in
lines of businesses Lazard Freres believes to be generally comparable to those
of the Company, and in other industries generally; (vii) reviewed the financial
terms of certain recent business combinations Lazard Freres believes to be
comparable in certain respects to the proposed Merger; (viii) reviewed the
historical stock prices and trading volumes of the Class A Shares; and (ix)
conducted such other financial studies, analyses and investigations as Lazard
Freres deemed appropriate.

In arriving at its opinion and making its presentation to the Special
Committee at the December 22 Special Committee Meeting, Lazard Freres was
advised that the Company and an affiliate of GTE propose to exchange certain
cellular assets owned by each of them for certain cellular assets owned by a
publicly-held company (the "Cellular Exchange"). Lazard Freres received a copy
of a letter dated December 19, 1994 from GTE's Senior Vice President - Finance
addressed to the GTE Financial Advisors regarding the Cellular Exchange to the
effect that it is an exchange of equivalent assets and, accordingly, is value
neutral to the Company. Lazard Freres has neither received nor reviewed any
other information regarding the Cellular Exchange, including any financial
projections or any other non-public financial information prepared by GTE or the
Company. With the consent of the Special Committee, Lazard Freres has assumed
that the Cellular Exchange involves the exchange of assets with substantially
equivalent value and, accordingly, will have an immaterial effect, if any, on
the Company. Further, although Lazard Freres was not informed of the fact, GTE
and the Company estimated that the Cellular Exchange, if consummated, would
involve not more than approximately 4.5% of the Company's total POPs.

For purposes of its opinion, Lazard Freres, with the Special Committee's
concurrence, has ascribed no value to the Company's rights under either (i) the
Competition Agreement or (ii) the Services Agreement.

In rendering its opinion, Lazard Freres did not review this Information
Statement or any similar document that may be prepared for use in connection
with the proposed Merger. In addition, Lazard Freres was not asked by the
Special Committee to solicit third party indications of interest in acquiring
all or any part of the Company, nor did Lazard Freres seek any such offers.

In connection with its review, Lazard Freres relied upon the accuracy and
completeness of the financial and other information concerning the Company
received by Lazard Freres and did not assume any responsibility for any
independent verification of such information or any independent valuation or
appraisal of any of the assets of the Company. With respect to the financial
forecasts provided to it by the Company, Lazard Freres assumed that such
financial forecasts were reasonably prepared on bases reflecting the best
currently available estimates and judgments of management of the Company as to
the future financial performance of the Company. Lazard Freres assumed no
responsibility for and expressed no view as to such forecasts or the assumptions
upon which they were based. Lazard Freres' opinion was based on economic,
monetary, market and other conditions as in effect on, and information made
available to it as of, the date of the opinion.

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<PAGE> 15

In rendering its opinion, Lazard Freres assumed that the Merger Agreement
entered into among the parties thereto would be identical in all material
respects to the Draft Merger Agreement, and that the Merger would be consummated
on the terms described in the Draft Merger Agreement, without any waiver of any
material terms or conditions by the Company. Lazard Freres also assumed that
obtaining the necessary regulatory approvals for the Merger would not have an
adverse effect on the Company.

In arriving at its opinion and making its presentation at the December 22
Special Committee Meeting, Lazard Freres considered and discussed certain
financial analyses and other factors. In connection with its presentation,
Lazard Freres presented the Special Committee with a summary of its analyses
(the "Lazard Freres Report"). The following is a brief summary of the analyses
performed by Lazard Freres in connection with rendering its opinion and
discussed with the Special Committee at the December 22 Special Committee
Meeting.

In reviewing the background of GTE's initial offer to acquire the Class A
Shares at $22.50 per share (the "GTE Initial Offer") and GTE's revised offer of
$25.50 per share (the "GTE Revised Offer"), Lazard Freres noted the GTE Initial
Offer implied a value for the Company's approximately 23.9 million POPs of
approximately $194 of market capitalization per net POP, $181 of cellular asset
value per net POP (which excludes the value of the Company's non-cellular
assets), and $156 of cellular license value per net POP (which excludes the
value of the Company's non-cellular assets and the value of the Company's
cellular net property, plant and equipment). Lazard Freres explained that the
GTE Initial Offer also represented a 26.8% premium over the closing price per
share of the Class A Shares on September 7, 1994, one day prior to GTE's
announcement of the GTE Initial Offer, on which date the closing price per share
of the Class A Shares was $17.75. In addition, Lazard Freres noted that the
Revised GTE Offer recommended by the Special Committee implied a value of
approximately $207 of market capitalization per net POP, $193 of cellular asset
value per net POP, and $169 of cellular license value per net POP; the GTE
Revised Offer also represented a 43.7% premium over the closing price per share
of the Class A Shares one day prior to GTE's announcement of the GTE Initial
Offer, and a 13.3% increase over the GTE Initial Offer.

Lazard Freres explained that in arriving at its opinion, Lazard Freres
performed a number of financial analyses, including: (i) a private market
transaction analysis, in which Lazard Freres reviewed publicly available
information on twenty-six private market sale transactions announced since July
1993, involving cellular operations in MSAs; (ii) a comparable public company
analysis, in which Lazard Freres reviewed certain financial, operating, and
stock market trading information of selected publicly traded companies engaged
primarily in the cellular business; and (iii) a discounted cash flow analysis,
in which Lazard Freres estimated the present value of the future cash flows that
the management of the Company expects its businesses to generate.

The material portions of the foregoing analyses (which are all of the
material valuation methodologies performed by Lazard Freres) are summarized
below.

Private Market Transaction Analysis. Lazard Freres reviewed publicly
available information on twenty-six private market sale transactions that were
announced and consummated since July 1993, involving cellular operations in MSAs
(the "Comparable Transactions"). Using regression analysis, private market value
for cellular properties in the Comparable Transactions were estimated as a
function of MSA ranking (e.g., New York City, as the largest MSA, ranked number
1). These results were then applied to the Company's MSA net POPs, with
adjustments made to the resulting valuations depending upon (i) how expected
population growth in each such MSA compared to the average population growth
expected for the United States, as a whole; (ii) how median household income in
each such MSA compared to median household income for the United States, as a
whole; (iii) how average commuting time for each such MSA compared to average
commuting time for the United States, as a whole; and (iv) whether each such MSA
was contiguous to other MSAs or RSAs serviced by the Company. Implied private
market values for the Company's non-controlled MSA net POPs were also estimated
utilizing a comparable public company analysis, in which Lazard Freres analyzed
for selected publicly traded companies in the cellular communications business
(the "Comparable Companies") the stock prices, market capitalizations, cellular
asset values, and publicly available estimates of projected operating cash flows
for 1994 through 1996. This analysis showed

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<PAGE> 16

an average ratio of market capitalization to projected cash flow in 1994 for the
Comparable Companies of 23.9. Applying this multiple to the projected 1994
operating cash flow of the Company's non-controlled MSA net POPs provided by
management, the implied value of such non-controlled MSA net POPs was estimated
at $341 per POP. The Comparable Companies reviewed by Lazard Freres in this
analysis included AirTouch Communications Inc., BCE Mobile Communications, Inc.,
Centennial Cellular Corp., Rogers Cantel Mobile Communications, Inc., United
States Cellular Corporation, and Vanguard Cellular Systems, Inc.

Implied private market valuations for the Company's net MSA POPs were then
calculated for the Company's approximately 12.9 million controlled MSA net POPs
(estimated at $211 per MSA net POP) and the Company's approximately 5.9 million
non-controlled MSA net POPs (estimated ranging from $280 per MSA net POP
utilizing the regression analysis referred to above to $341 per MSA net POP
utilizing the comparable public company analysis referred to above). After
adding (i) an assumed value of $130 per net POP for each of the Company's
approximately 3.3 million controlled and clustered RSA net POPs (where
"clustered RSA POPs" refers to the POPs serviced by the Company in RSAs that are
contiguous to other MSAs or RSAs serviced by the Company), (ii) an assumed value
of $105 per net POP for each of the Company's approximately 0.5 million
controlled and non-clustered RSA net POPs (where "non-clustered RSA net POPs"
refers to the POPs that are not clustered RSA net POPs), (iii) an assumed value
of $77 per net POP for each of the Company's approximately 1.2 million
non-controlled RSA net POPs, (iv) an implied value of $300 million for the
Company's wireless data business, estimated utilizing a discounted cash flow
analysis described below, and (v) assumed value of $30 million for the Company's
international assets, and subtracting net debt, Lazard Freres arrived at
estimated ranges of value for the common equity of the Company, including the
Class A Shares. Utilizing this methodology, the implied full private market
valuation of the Class A Shares was estimated at between $32.36 and $36.00 per
share.

Comparable Public Company Analysis. Lazard Freres compared certain
publicly available financial data of selected publicly traded companies in the
cellular communications business with the historical financial performance of
the Company. Lazard Freres analyzed on a per net POP basis for each of the
Company and such selected publicly traded companies, among other things, the
market values, market capitalizations, cellular asset values and cellular
license values. This analysis showed that the cellular asset values per net POP
for such publicly traded companies ranged from an estimated low of $117 to an
estimated high of $194, which compared to an implied value in the GTE Revised
Offer of approximately $193 of cellular asset value per net POP. The publicly
traded companies reviewed by Lazard Freres in this analysis included the
Comparable Companies, Commnet Cellular, Inc. and PriCellular Corp. Utilizing
this methodology, the implied value of the Class A Shares was estimated at
between $23.29 and $25.68 per share, compared to $25.50 in the GTE Revised
Offer.

Discounted Cash Flow Analysis. Lazard Freres performed a discounted cash
flow analysis of the Company based upon estimates of financial performance of
the Company provided by management. Utilizing these projections, Lazard Freres
discounted to the present (i) the projected stream of the Company's unlevered
cash flows for its cellular business through the year 2004, and (ii) the
projected terminal value of the Company's cellular business at such year based
upon a range of multiples of cash flow in year 2004. Lazard applied several
discount rates (ranging from 11% to 13%) and multiples of cash flow in year 2004
(ranging from 12.0 to 14.0). Similarly, for the Company's wireless data
business, Lazard Freres discounted to the present projected streams of the
Company's cash flows for its wireless data business and arrived at an estimated
valuation by applying several discount rates (ranging from 12.0% to 16.0%) and
multiples of cash flow in year 2004 (ranging from 13.5 to 15.5).

After adding an assumed value of $30 million for the Company's
international assets and subtracting net debt, Lazard Freres arrived at
estimated ranges of value for the common equity of the Company, including the
Class A Shares. Utilizing this methodology, the implied value of the Class A
Shares was estimated at between $19.99 and $28.60 per share, compared to $25.50
in the GTE Revised Offer.

In arriving at its written opinion and in presenting the Lazard Freres
Report to the Special Committee, Lazard Freres performed various financial
analyses, portions of which are summarized above. The summary set forth above
does not purport to be a complete description of Lazard Freres' analyses. Lazard
Freres

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<PAGE> 17

believes that its analyses must be considered as a whole and that selecting
portions of its analyses, without considering all such analyses, could create an
incomplete view of the process underlying its analyses set forth in the opinion
and the Lazard Freres Report. The preparation of a fairness opinion is a complex
process and is not necessarily susceptible to partial analysis or summary
description. With regard to the private market transaction analysis and the
comparable public company analyses summarized above, Lazard Freres selected
comparable public companies on the basis of various factors, including the size
of the public company and similarity of the line of business; however, no public
company utilized as a comparison is identical to the Company. Accordingly, an
analysis of the foregoing is not mathematical; rather, it involves complex
considerations and judgments concerning differences in financial and operating
characteristics of the comparable companies and other factors that could affect
the acquisition or public trading value of the comparable companies to which the
Company is being compared. In performing its analyses, Lazard Freres made
numerous assumptions with respect to industry performance, general business and
economic conditions and other matters, many of which are beyond the control of
the Company.

The analyses performed by Lazard Freres are not necessarily indicative of
actual past or future results or values, which may be significantly more or less
than such estimates. Additionally, analyses relating to the values of businesses
do not purport to be appraisals or to reflect the price at which such companies
may actually be sold, and such estimates are inherently subject to uncertainty.

Lazard Freres regularly engages in the valuation of businesses and their
securities in connection with mergers and acquisitions and for other purposes.
The Special Committee selected Lazard Freres to act as its financial advisor on
the basis of Lazard Freres' qualifications, expertise and reputation in
investment banking, in general, and mergers and acquisitions, specifically.

The Company has paid Lazard Freres a retainer fee of $250,000 and an
additional fee of $500,000 upon delivery of its written opinion. The Company has
also agreed to reimburse Lazard Freres for its out-of-pocket expenses, including
reasonable fees and disbursements of counsel, and to indemnify Lazard Freres and
its partners, employees, agents, affiliates and controlling persons against
certain liabilities under the federal securities laws, relating to or arising
out of its engagement.

OPINIONS OF FINANCIAL ADVISORS TO GTE

GTE was assisted in its negotiations with the Special Committee and Lazard
Freres by its financial advisors, Merrill Lynch and PaineWebber. Merrill Lynch
and PaineWebber regularly value businesses and their securities and provide
advice in connection with merger and acquisition transactions. Merrill Lynch and
PaineWebber previously served as financial advisors to GTE in connection with
the merger of a wholly-owned subsidiary of GTE with and into Contel. As part of
the agreements with Merrill Lynch and PaineWebber with respect to that
transaction, GTE agreed to retain Merrill Lynch and PaineWebber as financial
advisors in connection with any related restructuring. Based upon that agreement
and the expertise of both Merrill Lynch and PaineWebber in evaluating
transactions similar to the Merger, GTE decided to retain Merrill Lynch and
PaineWebber as its financial advisors in connection with the Merger.

PaineWebber has provided investment banking and other services to GTE from
time to time, including serving as underwriter in connection with the issuance
of GTE's debt and equity financings. During the last two years, PaineWebber has
earned compensation with respect to all such services, other than fees in
connection with the Merger, of approximately $5.0 million. In the future, GTE
may retain PaineWebber from time to time for similar services. In the ordinary
course of its business, PaineWebber actively trades debt and equity securities
of GTE for its own account and the accounts of its customers, and PaineWebber
therefore may, from time to time, hold a long or short position in such
securities. A director of GTE is engaged as a consultant to PaineWebber. See
"RELATED PARTY TRANSACTIONS -- Relationship between GTE Director and
PaineWebber".

Merrill Lynch has also provided investment banking and other services to
GTE from time to time, including serving as a dealer in connection with the
issuance of GTE's commercial paper and as an underwriter in connection with its
issuance of its debt and equity financings. During the last two years, Merrill
Lynch has earned compensation with respect to all such services, other than fees
in connection with the Merger, of approximately $7.4 million. Merrill Lynch is
presently providing GTE with financial and strategic

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<PAGE> 18

advice in connection with matters other than the Merger, for which it is
receiving customary compensation. In the future, GTE may retain Merrill Lynch
from time to time for similar services. In the ordinary course of its business,
Merrill Lynch actively trades debt and equity securities of GTE for its own
account and the accounts of its customers, and Merrill Lynch therefore may, from
time to time, hold a long or short position in such securities.

In connection with the transaction, the GTE Financial Advisors rendered
opinions to GTE to the effect that the price to be paid for the Class A Shares
in the Merger is fair to GTE from a financial point of view. A copy of the
fairness opinions of the GTE Financial Advisors are attached to this Information
Statement as Exhibits C-1 and C-2. Additional copies of such opinions are
available for inspection and copying at the principal executive offices of GTE
during regular business hours and are also available upon request directed to
GTE, One Stamford Forum, Stamford, CT 06904, Attention: Ronald J. Tuccillo,
Assistant Secretary.

Shareholders are cautioned that the opinions of the GTE Financial Advisors
were prepared solely for the benefit of GTE, to provide GTE advice regarding the
fairness of the price of $25.50 per Class A Share to GTE from a financial point
of view. The GTE Financial Advisors were not engaged to evaluate the fairness of
the transaction or the price to Class A Stockholders.

The GTE Financial Advisors believe that their analyses must be considered
as a whole and that selecting portions of their analyses and of the factors
considered by them without considering all factors and analyses, could create an
incomplete view of the processes underlying their analyses and opinion. The
preparation of a fairness opinion is a complex process and is not necessarily
susceptible to partial analyses or summary descriptions.

In rendering their opinions, the GTE Financial Advisors did not make or
seek to obtain appraisals of the Company's assets in connection with their
analyses of the valuation of the Company and did not determine the amount of
consideration to be paid in the Merger. In addition, the GTE Financial Advisors
were not requested to and did not solicit third parties who might be interested
in acquiring all or any part of the Company. In their respective analyses, the
GTE Financial Advisors made numerous assumptions with respect to industry
performance, general business and economic conditions and other matters, many of
which are beyond the Company's control. Any estimates of value contained therein
are not necessarily indicative of actual values, which may be significantly more
or less favorable than as set forth therein. Estimates of values of companies do
not purport to be appraisals or necessarily reflect the prices at which
companies may actually be sold. Because such estimates are inherently subject to
uncertainty, none of the Company, GTE or the GTE Financial Advisors or any other
person assumes responsibility for their accuracy.

In arriving at their opinions, the GTE Financial Advisors (a) reviewed the
Company's Annual Reports, Forms 10-K and related financial information for the
five fiscal years ended December 31, 1993 and the Company's Forms 10-Q and the
related unaudited financial information for the quarterly periods ending March
31, June 30, and September 30, 1994; (b) reviewed certain information, including
financial forecasts, relating to the business, earnings, cash flow, assets and
prospects of the Company, furnished to them by the Company; (c) conducted
discussions with members of senior management of the Company concerning its
businesses and prospects; (d) reviewed the historical market prices and trading
activity for the Class A Shares and compared them with that of certain publicly
traded companies which they deemed to be reasonably similar to the Company; (e)
compared the results of operations of the Company with that of certain companies
which they deemed to be reasonably similar to the Company; (f) compared the
proposed financial terms of the transactions contemplated by the Merger
Agreement with the financial terms of certain other mergers and acquisitions
which they deemed to be relevant; (g) considered the pro forma effect of the
Merger on GTE's capitalization ratios, earnings and cash flow; (h) considered a
discounted cash flow analysis on future cash flows that management of the
Company expects the Company to generate; (i) reviewed a draft of the Merger
Agreement; and (j) reviewed such other financial studies and analyses and
performed such other investigations and took into account such other matters as
they deemed necessary, including their assessments of general economic, market
and monetary conditions.

The GTE Financial Advisors will each receive an aggregate fee of $500,000
in connection with the transaction. A retention fee of $50,000 each was paid at
the time the GTE Financial Advisors were retained

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<PAGE> 19

and a fee of $450,000 each will be paid at the time of the Merger. In addition,
GTE has agreed to reimburse the GTE Financial Advisors for all of their
reasonable out-of-pocket expenses, including but not limited to, legal fees and
travel expenses. GTE also agreed to indemnify and hold harmless the GTE
Financial Advisors against certain liabilities, including liabilities under the
federal securities laws or arising out of or in connection with their rendering
of services.

In preparing their opinions, the GTE Financial Advisors relied on the
accuracy and completeness of all information supplied or otherwise made
available to them by the Company, and the GTE Financial Advisors have not
assumed any responsibility to independently verify such information. With
respect to the financial forecasts furnished by the Company, the GTE Financial
Advisors assumed that they have been reasonably prepared and reflect the best
currently available estimates and judgment of the Company's management as to the
expected future performance of the Company. The opinions of the GTE Financial
Advisors do not address the relative merits of the Merger and any other
transactions or business strategies discussed by the Board of Directors of GTE
as alternatives to the Merger or the decision of the Board of Directors of GTE
to proceed with the Merger. In rendering their opinions, the GTE Financial
Advisors were not engaged to act as an agent or fiduciary of GTE's equity
holders or any other third party.

Summary of PaineWebber's Opinion to the Board of GTE Corporation

The following paragraphs summarize the material financial and comparative
analyses performed by PaineWebber in arriving at the PaineWebber opinion. The
following does not purport to be a complete description of the analyses
performed, or the matters considered by PaineWebber in arriving at the
PaineWebber opinion.

PaineWebber delivered its December 1994 Opinion Letter (the "PaineWebber
Opinion Letter") to the Board of Directors of GTE at a meeting held on December
27, 1994. The PaineWebber Opinion Letter relied on the valuation methods
described below to determine a range of values for the Company.

Discounted Cash Flow Analysis. PaineWebber prepared and reviewed the
results of an unlevered discounted cash flow analysis of the Company based on
certain operating and financial assumptions. The assumptions were based on two
sets of financial projections provided to PaineWebber by the management of the
Company: a five year strategic plan and a ten year projection.

The purpose of the discounted cash flow analysis was to determine the
present value of each of the Company's unlevered after-tax free cash flows over
the projected periods. To calculate the value of a business using a discounted
cash flow analysis, the projected cash flows for each year together with the
estimated value of the business in the final year of the projected period
("Terminal Value") are discounted to the present using various assumed discount
rates. PaineWebber estimated the Terminal Value for the Company in two
components. First, PaineWebber applied an earnings before interest, taxes,
depreciation and amortization ("EBITDA") multiple to the Company's EBITDA,
before minority interest and equity in unconsolidated affiliates, in the final
year of the projected period. PaineWebber then applied a price/earnings multiple
("P/E multiple") to the net tax-affected amount of minority interests and equity
in earnings of unconsolidated affiliates (discounted by 30% to reflect a
minority interest). PaineWebber then added the value of the Company's 10%
interest in licenses in the states of Sonora and Sinaloa, Mexico, calculated as
$48 per POP for the Company's approximately 0.4 million POPs. The sum of these
components derived the implied total market capitalization of the Company at
December 31, 1994. PaineWebber then subtracted the Company's estimated net debt
at December 31, 1994 of $2,114.5 million and divided by the number of shares
outstanding at December 31, 1994 of 100.0 million to determine the implied
equity value per Class A Share.

PaineWebber considered exit EBITDA multiples ranging from 10.5x to 12.5x
for both sets of projections and exit P/E multiples ranging from 18.0x to 22.0x
for the five year projections and 16.0x to 20.0x for the ten year projections.
For the purposes of determining the appropriate discount rate to be applied in
the discounted cash flow analyses, PaineWebber considered weighted average costs
of capital ranging from 13.0% to 15.0% to discount all values from December 31,
1994 to January 1, 1995 and 10.0% to 12.0% to discount all values from December
31, 2004 to January 1, 2000.

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<PAGE> 20

This analysis resulted in a range of equity values per share for the Class
A Shares of between $19.56 to $30.46 using the five year projections and $14.53
to $25.45 using the ten year projections. PaineWebber noted that the per share
price of $25.50 fell within the range implied by the five year projections. Due
to the inherently less certain nature of the ten year projections, and the fact
that the Company had advised PaineWebber that it had not prepared the ten year
projections as part of its normal planning process, PaineWebber relied more
heavily on the analysis derived from the five year projections.

Comparable Transactions Analysis. PaineWebber reviewed several publicly
announced merger and acquisition transactions in the cellular communications
industry, together with information regarding certain transactions that GTE
furnished to PaineWebber. Using detailed information regarding MSA market rank
of the target's POPs in these transactions, PaineWebber developed a range of
assumed private market values for the various MSA markets. PaineWebber also
developed valuation assumptions for RSA POPs. PaineWebber then applied these per
POP valuation ranges to the Company's POPs. PaineWebber applied a range of
discounts between 0% and 30% to the Company's non-controlled POPs. This
methodology resulted in a range of values per Class A Share of $12.75 to $30.30.
PaineWebber noted that the per share price of $25.50 fell within this range.

Comparable Public Companies Analysis. PaineWebber compared selected
historical stock and earnings data and financial ratios for the Company to the
corresponding data and ratios of certain publicly-traded companies which
PaineWebber deemed to be comparable to the Company. For the purposes of the
PaineWebber Opinion Letter, the set of companies which PaineWebber deemed
comparable to the Company was comprised of Airtouch Communications Inc.,
Cellular Communications, Inc., Cellular Communications of Puerto Rico, Inc.,
Centennial Cellular Corporation, Commnet Cellular, Inc., InterCel Inc., LIN
Broadcasting Corporation, United States Cellular Corporation and Vanguard
Cellular Systems, Inc. (the "Comparable Group").

This analysis resulted in a range of market capitalization of cellular
assets (defined as total market capitalization, less minority interests, less
estimated public market value of non-cellular assets) per POP of $330 to $111
with a median of $170 and a range of market capitalization of MSA cellular
assets (defined as market capitalization of cellular assets less the value of
RSA cellular assets at $90 per RSA POP) per POP from $451 to $133 with a median
of $206. PaineWebber noted that the proposed price of $25.50 implied a market
capitalization of cellular assets per POP for the Company of $198 and a market
capitalization of MSA cellular assets per POP of $224.

Minority Buy Out Analysis. PaineWebber examined selected minority buy out
transactions not limited to the cellular communications industry on the basis of
percentage change from initial offer price to final offer price and percentage
premium of the offer price to the trading price per share at six months prior to
announcement, one month prior to announcement, one day prior to announcement,
one day after announcement, the latest twelve months ("LTM") high and the LTM
low. This analysis resulted in average premiums of 11.7% (percent change from
initial offer price to final offer price) and 39.8%, 43.3%, 31.5%, 10.9%, 1.8%
and 85.4%, respectively and resulted in median premiums of 4.6% (percent change
from initial offer price to final offer price) and 33.3%, 33.3%, 20.4%, 7.4%,
2.2% and 58.9%, respectively. PaineWebber examined the premiums paid in the most
recent minority buy out in the cellular communications industry, U.S. West,
Inc.'s purchase of U.S. West New Vector Group, Inc. on November 12, 1990, which
resulted in premiums of 22.2% (percent change from initial offer price to final
offer price) and 47.9%, 74.3%, 44.3%, 28.0%, 2.9% and 122.8%, respectively.
PaineWebber noted that the per share price of $25.50 implied premiums to the
trading price per share of the Class A Shares of 13.3% (percent change from
initial offer price to final offer price) and 56.9%, 39.7%, 43.7%, 10.3%, 6.3%
and 96.2%, respectively.

Historical Market Valuation and Ownership Analysis. PaineWebber reviewed
the daily performance of the intra-day and closing market prices per share and
trading volumes of the Class A Shares from April 21, 1988 to December 2, 1994.
This analysis was utilized to provide historical background for the manner in
which the public trading market had valued the Class A Shares since their
initial public offering. PaineWebber also reviewed the volume of the Class A
Shares which traded and the prices at which the Class A Shares traded for the
period January 1, 1994 to December 5, 1994 and since the announcement of the
Merger on September 8,

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<PAGE> 21

1994 to December 5, 1994. The implied premiums to the market price of the Class
A Shares at specified intervals is set forth above in "SPECIAL
FACTORS -- Opinions of Financial Advisors to GTE -- Summary of PaineWebber's
Opinion to the Board of GTE Corporation -- Minority Buy Out Analysis".

Summary of Merrill Lynch's Opinion to the Board of GTE Corporation

The following paragraphs summarize the material financial and comparative
analyses performed by Merrill Lynch in arriving at the Merrill Lynch Opinion.
The following does not purport to be a complete description of the analyses
performed, or the matters considered by Merrill Lynch in arriving at the Merrill
Lynch Opinion.

Merrill Lynch delivered its December 1994 Opinion Letter (the "Merrill
Opinion Letter") to the Board of Directors of GTE at a meeting held on December
27, 1994. The Merrill Opinion Letter relied primarily upon two valuation methods
to determine a range of values for the Company: a discounted cash flow analysis
and a private market transaction analysis. In addition, the Merrill Opinion
Letter relied upon analysis of comparable public companies, premiums paid in
similar transactions, pro forma merger consequences, and historical market
valuation and ownership.

Discounted Cash Flow Analysis. Merrill Lynch performed a discounted cash
flow analysis based upon forecasts provided by the Company's management. The
Company's management provided Merrill Lynch with two sets of financial
forecasts: a 5-year strategic plan projection and a 10-year projection. Due to
the inherently less certain nature of the 10-year projections, and the fact that
the Company had advised Merrill Lynch that it had not prepared the 10-year
projections as part of its normal planning process, Merrill Lynch relied more
heavily on the analysis derived from the five-year projections. The following
assumptions were made in the discounted cash flow analysis: (1) a range of
discount rates from 12.0% to 14.0% was used to discount all values from December
31, 1999 to January 1, 1995 and in the case of the 10-year discounted cash flow
analysis, a range of discounted rates from 10.0% to 12.0% was used to discount
all values from December 31, 2004 to January 1, 2000; and (2) a range of EBITDA
exit multiples from 10.0x to 12.0x was used to determine the terminal value
using the EBITDA exit methodology. Merrill Lynch discounted to present value the
projected five-year and ten-year streams of free cash flow, the year 1999
terminal value and the year 2004 terminal value based upon the ranges of
discount rates and EBITDA multiples described above. Total enterprise value was
adjusted for the Company's minority interest obligations and unconsolidated
equity investments. Based on the exit multiple methodology, a P/E multiple of
16.0x to 20.0x was applied to the net amount of the minority interest
obligations and the tax-affected equity income in unconsolidated subsidiaries
(discounted 30% for the minority position) in the terminal year. Total
enterprise value was also adjusted upward by $20 million to reflect the
Company's interests in Mexico.

Utilizing the 5-year projections Merrill Lynch arrived at a range of values
per Class A Share of approximately $19.63-$30.90 per share, and utilizing the
10-year projections Merrill Lynch arrived at a range of values per Class A Share
of approximately $14.93-$25.97 per share.

Private Market Transaction Analysis. Merrill Lynch reviewed several
publicly announced merger and acquisition transactions in the cellular
communications industry, together with information regarding certain private
transactions that GTE furnished to Merrill Lynch. Using detailed information
regarding MSA market rank and the target's POPs in these transactions, Merrill
Lynch developed a range of assumed private market values for the various MSA
markets. Merrill Lynch also developed valuation assumptions for RSA POPs.
Merrill Lynch then applied these per POP valuation ranges to the Company's POPs.
Merrill Lynch applied a range of discounts between 0% and 30% to the Company's
non-controlled POPs to reflect reduced value based on absence of control. This
methodology resulted in a range of values per Class A Share of $12.76 to $30.31
per share.

Comparable Public Companies Analysis. Merrill Lynch compared selected
historical stock and earnings data and financial ratios for the Company to the
corresponding data and ratios of certain publicly-traded companies which Merrill
Lynch deemed to be comparable to the Company. For the purposes of the Merrill
Opinion Letter, the set of companies which Merrill Lynch deemed comparable to
the Company was the Comparable Group.

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<PAGE> 22

This analysis resulted in a range of market capitalization of cellular
assets (defined as total market capitalization, less minority interests, less
estimated public market value of non-cellular assets) per POP of $331 to $115
with a median of $169 and a range of market capitalization of MSA cellular
assets (defined as market capitalization of cellular assets, less value of RSA
assets at $90 per POP) per POP from $343 to $133 with a median of $215. Merrill
Lynch noted that the price of $25.50 per Class A Share implied a market
capitalization of cellular assets per POP for the Company of $198 and a market
capitalization of MSA cellular assets per POP of $224.

Premiums Paid in Selected Minority Buy Outs. Merrill Lynch examined
selected minority buy out transactions not limited to the cellular
communications industry on the basis of percentage change from initial offer
price to the final offer price and percentage premium of the offer price to the
trading price per share at six months prior to announcement, one month prior to
announcement, one day prior to announcement, one day after announcement, the LTM
high and the LTM low. This analysis resulted in average premiums of 11.7% (%
change from initial offer price to final offer price) and 39.8%, 43.3%, 31.5%,
10.9%, 1.8% and 85.4%, respectively, and resulted in median premiums of 4.6% (%
change from initial offer price to final offer price) and 33.3%, 33.3%, 20.4%,
7.4%, 2.2%, and 58.9%, respectively. Merrill Lynch examined the premiums paid in
the most recent minority buy out in the cellular communications industry, U.S.
West, Inc's purchase of U.S. West New Vector Group, Inc. on November 12, 1990,
which resulted in premiums of 22.2% (% change from initial offer price to final
offer price) and 47.9%, 74.3%, 44.3%, 28.0%, 2.9% and 122.8%, respectively.
Merrill Lynch noted that the price of $25.50 per Class A Share implied premiums
to the trading price per share of the Class A Shares of 13.3% (% change from
initial offer price to final offer price) and 56.9%, 39.7%, 43.7%, 10.3%, 6.3%
and 96.2%, respectively.

Pro Forma Merger Consequences. Merrill Lynch examined the potential impact of
the Merger on the financial results and capitalization of GTE and found it to be
immaterial.

Historical Market Valuation and Ownership Analysis. Merrill Lynch reviewed the
daily performance of the intra-day and closing market prices per share and
trading volumes of the Class A Shares from April 21, 1988 to December 2, 1994.
This analysis was utilized to provide historical background for the manner in
which the public trading market had valued the Class A Shares since their
initial public offering. Merrill Lynch also reviewed the volume of the Class A
Shares which traded and the prices at which the Class A Shares traded for the
period January 1, 1994 to December 5, 1994 and since the announcement of the
Merger on September 8, 1994 to December 5, 1994. The implied premiums to the
market price of the Class A Shares at specified intervals is set forth above in
"SPECIAL FACTORS -- Opinions of Financial Advisors to GTE -- Summary of Merrill
Lynch's Opinion to the Board of GTE Corporation -- Premiums Paid in Selected
Minority Buy Outs".

WRITTEN CONSENT; PURPOSE OF THE MERGER; PLANS FOR THE COMPANY

The Record Date for stockholders entitled to notice of or entitled to give
consent to the Merger was February , 1995. As of the Record Date there were
issued and outstanding 9,970,953 Class A Shares and 90,000,000 Class B Shares.
Each Class A Share is entitled to one vote per share and each Class B Share is
entitled to five votes per share. On the Record Date, Contel owned 90,000,000
Class B Shares, which accounted for approximately 98% of the combined voting
power of the outstanding Class A and Class B Shares. Pursuant to the DGCL,
Contel, as holder of record of more than 50% of the combined voting power of the
Class A and Class B Shares, approved the Merger by written consent on February
, 1995. Consequently, no action on the part of any other stockholder of the
Company is necessary to authorize or to consummate the Merger and no meeting of
stockholders of the Company will be held in connection with the Merger.

The Merger will enable GTE, through its wholly-owned subsidiary Contel, to
acquire the entire equity interest in the Company and permit GTE to implement a
unified marketing strategy for its cellular operations, provide increased
flexibility to pursue future opportunities, generate efficiencies in the
combined cellular communications business and eliminate complexities raised by
operating two cellular businesses with overlapping but not identical ownership.
The acquisition of the entire equity interest in the Company has been structured
as a merger in order to provide a prompt and orderly transfer of the minority
interest in the

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Company from the Class A Stockholders to Contel and GTE, and to provide the
Class A Stockholders with cash in exchange for their Class A Shares.

From time to time, GTE has attempted to align its legal entities and
simplify its corporate structure. As part of this process, Contel adopted a plan
of liquidation in January 1993 and continues to wind up its affairs. GTE also
plans to consolidate the operations of the Company and GTE Mobilnet over time. A
merger transition team has been formed to develop plans for the consolidation.
The purpose of the consolidation will be to provide operating efficiencies,
reduce the overhead of GTE's cellular properties, maximize marketing advantage
of a single brand identity and enhance GTE's ability to compete in the cellular
communications market by providing increased flexibility to pursue joint
ventures and other combinations and new business opportunities. The merger
transition team has recommended that certain functions be centralized in Atlanta
and that area operations focus on tactical operational issues, network planning,
construction/maintenance, revenue goals and sales activities. The merger
transition team is continuing to examine both the nature of GTE's cellular
communications business and the structure of the cellular communications market.

REGULATORY REQUIREMENTS

The Merger will require notice filings in a number of states, but the
approval of regulatory authorities will not be required in any jurisdiction.

MERGER CONSIDERATION

The aggregate consideration to be paid to Class A Stockholders in
connection with the Merger is approximately $254 million. The acquisition of the
minority interest in the Company will be financed through equity contributions
from GTE. GTE will make an equity contribution to Contel and Contel will in turn
make an equity contribution to CCI Acquisition. GTE initially will finance such
equity contributions through the issuance of short term debt. The short term
debt is expected to be issued with terms comparable to those pursuant to which
GTE periodically issues short term debt in the ordinary course of its business.

ACCOUNTING TREATMENT OF THE MERGER

The purchase method of accounting will be used to account for the Merger.
After the Merger, GTE, through its ownership of Contel, will increase its
interest in the Company from 90% to 100%. Because the Company's accumulated
losses exceed the amount attributable to the 10% minority ownership interest,
GTE currently is required to record 100% of the net book value and net income or
net loss of the Company in its financial statements. Accordingly, the Merger
will not alter GTE's present interest in such net book value or net income or
loss of the Company.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER

The receipt of cash for Class A Shares purchased pursuant to the Merger
will be a taxable transaction for federal income tax purposes under the Internal
Revenue Code of 1986, as amended (the "Code"), and may also be a taxable
transaction under applicable state, local, foreign or other tax laws.

Generally, a Class A Stockholder will recognize a gain or loss equal to the
difference between such holder's basis in the Class A Shares held by such holder
and the amount of cash received in exchange therefor pursuant to the Merger.

The gain or loss will be treated as a capital gain or loss if the Class A
Shares are held as capital assets. The gain or loss will be considered to be a
long-term capital gain or loss if, on the date the stockholder receives cash for
the Class A Shares, those shares have been held by such stockholder for more
than one year. For 1995, the maximum federal income tax rate for individuals on
net long-term capital gains is 28%, and the maximum individual marginal tax rate
on net short-term capital gains and on ordinary income is 39.6%. The maximum
federal income tax rate for corporations is 35% on all capital gains and
ordinary income. If a Class A Stockholder recognizes a capital loss as a result
of receiving cash for the Class A Shares pursuant to

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<PAGE> 24

the Merger, such loss will only be deductible to the extent of other capital
gains, plus, in the case of an individual Class A Stockholder, $3,000 per year.

The federal income tax consequences described in the preceding paragraph
may not apply to (i) Class A Shares acquired upon exercise of incentive stock
options, non-qualified stock options, or otherwise as compensation, (ii) certain
tax-exempt stockholders, (iii) stockholders that are subject to special tax
provisions, such as banks and insurance companies and (iv) certain nonresident
aliens and foreign corporations.

THE DISCUSSION OF FEDERAL INCOME TAX CONSEQUENCES SET FORTH ABOVE IS FOR
GENERAL INFORMATION ONLY AND IS BASED ON EXISTING LAW AS OF THE DATE OF THIS
INFORMATION STATEMENT. EACH CLASS A STOCKHOLDER IS URGED TO CONSULT HIS OR HER
TAX ADVISOR TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO HIM OR HER OF THE
MERGER (INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL, FOREIGN AND
OTHER TAX LAWS).

CERTAIN EFFECTS OF THE MERGER

The Company is currently subject to the informational filing requirements
of the Securities Exchange Act of 1934 (the "Exchange Act"), and is required to
file reports and other information with the Securities and Exchange Commission
(the "Commission") relating to its business, financial statements and other
matters. As a result of the Merger, there will cease to be any public market for
the Class A Shares, and after the Effective Time (as defined below), the Class A
Shares will cease to be quoted on the Nasdaq National Market. When the Merger
occurs, the Surviving Corporation is expected to file with the Commission a
Certification and Notice of Termination of Registration of the Class A Shares
under the Exchange Act (the "Certification"). Upon filing of the Certification,
the Surviving Corporation will no longer be required to file reports and other
information under the Exchange Act. Once the Certification has been filed, the
Exchange Act (including the proxy solicitation provisions of Section 14(a), the
periodic reporting requirements of Section 13 and the short swing trading
provisions of Section 16(b)) will no longer apply to the Surviving Corporation.
Additionally, upon the termination of the registration of the Class A Shares,
the shares will no longer constitute "margin securities" under the regulations
of the Board of Governors of the Federal Reserve System.

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THE MERGER AGREEMENT

The following summary of the Merger Agreement is qualified in its entirety
by reference to the provisions of the Merger Agreement, the full text of which
is attached hereto as Exhibit A and incorporated by reference herein.

GENERAL

CCI Acquisition is a wholly-owned subsidiary of Contel formed for the
purpose of the Merger. Contel, a wholly owned subsidiary of GTE, has adopted a
plan of liquidation. The Merger Agreement provides, upon the terms and subject
to the conditions set forth therein, that CCI Acquisition will be merged with
and into the Company and that the Company will be the Surviving Corporation.
Pursuant to the Merger, (i) each Class A Share outstanding immediately prior to
the time of the filing of a certificate of merger with the Secretary of State of
the State of Delaware (the "Effective Time"), other than any Class A Shares as
to which appraisal rights have been properly exercised under the DGCL, will be
converted into the right to receive the Merger Consideration, (ii) each Class A
Share held by the Company and each share of common stock of CCI Acquisition
outstanding immediately prior to the Effective Time will be cancelled, and no
payment will be made with respect thereto and (iii) each outstanding Class B
Share will be converted into one newly issued share of the Class B common stock
of the Surviving Corporation.

DESIGNATION OF DIRECTORS; CERTIFICATE OF INCORPORATION AND BY-LAWS

The Merger Agreement provides that the directors of the Company at the
Effective Time will be the directors of the Surviving Corporation and will hold
office from the Effective Time until their respective successors are duly
elected or appointed and qualified in the manner provided in the certificate of
incorporation and by-laws of the Surviving Corporation. The certificate of
incorporation and by-laws of the Company shall be the certificate of
incorporation and by-laws of the Surviving Corporation.

REPRESENTATIONS AND WARRANTIES

The Merger Agreement contains standard representations and warranties on
the part of GTE, Contel, CCI Acquisition and the Company relating to, among
other things, due organization and qualification and authority to enter into and
perform the respective obligations of the parties under the Merger Agreement. In
addition, CCI Acquisition represents in the Merger Agreement that it has not
engaged in any business activities other than those related to the acquisition
of the Company.

INDEMNIFICATION AND OTHER COVENANTS

Pursuant to the Merger Agreement, the Company has agreed that it will
indemnify and hold harmless, and, after the Effective Time, the Surviving
Corporation and GTE will indemnify and hold harmless, each present and former
director and officer of the Company (each an "Indemnified Party") against any
losses, claims, damages, liabilities, costs, expenses, judgments and amounts
paid in settlement arising out of or pertaining to any action or omission
occurring prior to the Effective Time (including without limitation, any actions
or omissions which arise out of or relate to the transactions contemplated by
the Merger Agreement) to the full extent permitted under the DGCL, provided that
any determination required to be made with respect to whether an Indemnified
Party's conduct complied with the standards set forth in the DGCL shall be made
in accordance with the DGCL. GTE has agreed to maintain in place the current
policy of insurance covering officers and directors of the Company (or an
equivalent policy) for a period of three years after the Effective Time.

The Company also covenants that, from the date of the Merger Agreement to
the Effective Time, the Company will conduct its business in the ordinary
course.

The Company and CCI Acquisition each covenant that, promptly after the
execution of the Merger Agreement, they will cooperate in the preparation of all
materials necessary to be filed with the Commission in connection with the
Merger. Additionally, each of the parties to the Merger Agreement agrees to use
its

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<PAGE> 26

commercially reasonable efforts to take all action and to do all things
necessary to consummate the transactions contemplated by the Merger Agreement,
including using commercially reasonable efforts to (i) obtain all necessary
contractual waivers and consents, (ii) obtain all necessary consents and
authorizations as are required to be obtained under any federal, state or
foreign law or regulations, (iii) defend all lawsuits or other legal proceedings
challenging the Merger Agreement or the consummation of the transactions
contemplated thereby, (iv) lift or rescind any injunction or restraining order
or other order adversely affecting the ability of the parties to consummate the
transactions contemplated by the Merger Agreement and (v) effect all
registrations and filings necessary to consummate the transactions contemplated
by the Merger Agreement.

Pursuant to the Merger Agreement, Contel agreed to execute a written
consent as majority stockholder of the Company approving the Merger and the
Merger Agreement.

CONDITIONS TO THE MERGER

The respective obligations of CCI Acquisition, the Company, Contel and GTE
to effect the Merger are subject to the satisfaction at or prior to the
Effective Time of the following conditions: (i) the Merger Agreement and the
transactions contemplated by the Merger Agreement shall have been approved by
any necessary vote of the stockholders of the Company and CCI Acquisition in
accordance with applicable law and the terms of the Merger Agreement; (ii) no
statute, rule, regulation, executive order, decree or injunction (preliminary or
permanent) shall have been enacted, entered, promulgated or enforced by any
federal or state court of competent jurisdiction in the United States or other
governmental authority which prohibits the consummation of the Merger remains in
effect after GTE, CCI Acquisition and the Company shall have used all
commercially reasonable efforts to lift any injunction; (iii) no consents of or
filings with any governmental entity shall be required for consummation of the
Merger which have not been obtained or filed and (iv) the Special Committee
shall not have modified or rescinded its recommendation with respect to the
Merger.

TERMINATION

The Merger Agreement may be terminated and the Merger abandoned at any time
prior to the Effective Time, notwithstanding approval thereof by the
stockholders of the Company: (i) by mutual written consent of each of the
Company and CCI Acquisition, (ii) by the Company or CCI Acquisition if any court
of competent jurisdiction in the United States or other United States
governmental body has issued an order, decree or ruling or taken any other
action permanently restraining, enjoining or otherwise prohibiting the Merger
and such order, decree, judgment, injunction, ruling or other action has become
final and nonappealable or (iii) by the Company or CCI Acquisition if the Merger
does not occur within 120 days of the date of the Merger Agreement unless such
delay is caused by regulatory review of required filings.

AMENDMENT

The Merger Agreement provides that any provision of the Merger Agreement
may be amended by action taken by the Company and CCI Acquisition at any time
prior to the Effective Time, provided that following approval of the Merger
Agreement by the stockholders of the Company or CCI Acquisition any amendment of
the Merger Agreement will be subject to compliance with Section 251(d) of the
DGCL. The prior approval of a majority of the members of the Special Committee
shall also be required in connection with any amendment or modification of the
Merger Agreement by or on behalf of the Company. The Merger Agreement may not be
amended, modified or supplemented except by an instrument in writing signed on
behalf of the party against whom enforcement is sought.

EXTENSION; WAIVER

The Merger Agreement provides that at any time prior to the Effective Time,
the Company, CCI Acquisition, GTE and Contel may (i) extend the time for the
performance of any of the obligations or other acts of the other parties, (ii)
waive any inaccuracies in the representations and warranties of the other
parties contained therein or in any document, certificate or writing delivered
pursuant to the Merger Agreement or (iii) waive compliance by the other parties
with any of the agreements or conditions contained in the Merger

25
<PAGE> 27

Agreement other than those relating to indemnification. Any agreement on the
part of any party to any such extension or waiver shall be valid only if set
forth in writing and signed on behalf of such party, and, in the case of an
extension or waiver by the Company, if such extension or waiver has been
approved by a majority of the members of the Special Committee.

PAYMENT OF THE MERGER CONSIDERATION

In order to receive $25.50 per Class A Share (less any applicable
withholding taxes) (the "Merger Consideration"), Class A Stockholders must
complete and return certificates representing their Class A Shares with the
Letter of Transmittal that is being mailed to the Class A Stockholders with this
Information Statement. These documents were mailed to the Class A Stockholders
beginning on March , 1995. After the Merger has been consummated, the
Disbursing Agent will issue payment of the Merger Consideration when it receives
a holder's Class A Shares and a validly completed Letter of Transmittal for
those shares. Class A Stockholders should not send their Class A Shares without
a completed Letter of Transmittal. Class A Stockholders who wish to exercise
appraisal rights must not surrender their certificates representing Class A
Shares pursuant to the Letter of Transmittal and must comply with the provisions
of Section 262 of the DGCL. See "DISSENTERS' RIGHTS OF APPRAISAL".

When a Class A Stockholder properly surrenders certificates for Class A
Shares to the Disbursing Agent, those shares will be canceled and the Class A
Stockholder will receive the Merger Consideration. No interest will be paid with
respect to the Merger Consideration. Class A Stockholders who wish to receive
the Merger Consideration promptly after the Merger should send their Class A
Shares along with a properly completed and executed Letter of Transmittal to the
Disbursing Agent as soon as possible.

If the Merger is not consummated within 120 days of the date of this
Information Statement, the Disbursing Agent will return all certificates
representing Class A Shares to the Class A Stockholders.

Any Class A Stockholder who has lost certificates representing their Class
A Shares should make arrangements (which may include the posting of a bond or
other satisfactory indemnification) to replace lost certificates. These
arrangements should be made with the Disbursing Agent, which is also the
transfer agent for the Class A Shares.

The method of delivery of all required documents is at the option and risk
of the Class A Stockholder. If a Class A Stockholder elects to mail certificates
representing Class A Shares, the Company recommends properly insuring such
certificates and sending them by registered mail with return receipt requested.

Under Federal Income Tax Backup and Withholding Rules, unless an exception
applies under applicable laws and regulations, the Disbursing Agent will be
required to withhold and remit to the United States Treasury 31% of the cash
payment for Class A Shares made to a stockholder, a dissenting stockholder or
any other payee pursuant to the Merger, unless such stockholder or other payee
provides his taxpayer identification number (employer identification number or
social security number) and certifies that such number is correct. THEREFORE,
EACH CLASS A STOCKHOLDER SHOULD COMPLETE AND SIGN THE MAIN SIGNATURE FORM, AND
IF APPLICABLE, EACH PAYEE SHOULD COMPLETE AND SIGN THE SUBSTITUTE FORM W-9
INCLUDED AS PART OF THE LETTER OF TRANSMITTAL, IN ORDER TO PROVIDE THE
INFORMATION AND CERTIFICATION NECESSARY TO AVOID BACKUP WITHHOLDING. FOREIGN
STOCKHOLDERS MAY BE REQUIRED TO SUBMIT A FORM W-8 AND A FURTHER CERTIFICATION IN
ORDER TO AVOID BACKUP WITHHOLDING.

All questions as to the form of all documents and the validity, form and
acceptance of any certificates representing Class A Shares for payment will be
determined by the Disbursing Agent and the Company, whose determination will be
final and binding.

ALL QUESTIONS AND REQUESTS FOR INFORMATION RELATING TO THE PROCEDURE FOR
PAYMENT OF THE MERGER CONSIDERATION FOR THE CLASS A SHARES SHOULD BE DIRECTED TO
THE DISBURSING AGENT -- CHEMICAL BANK, REORGANIZATION DEPARTMENT, P.O. BOX 396,
BOWLING GREEN STATION, NEW YORK, NY 10274.

26
<PAGE> 28

DISSENTERS' RIGHTS OF APPRAISAL

Under Section 262 of the DGCL ("Section 262"), Class A Stockholders who do
not wish to accept the Merger Consideration have the right to seek appraisal of
the fair value of their Class A Shares in the Delaware Court of Chancery.
Section 262 is set forth in its entirely as Exhibit D to this Information
Statement and incorporated by reference herein. The following discussion is not
a complete statement of the law relating to appraisal rights and is qualified in
its entirety by reference to Exhibit D. This discussion and Exhibit D should be
reviewed carefully by any holder who wishes to exercise statutory appraisal
rights or who wishes to preserve the right to do so, as failure to comply with
the procedures set forth therein will result in the loss of appraisal rights.
Moreover, because of the complexity of the procedures for exercising the right
to dissent and seek appraisal rights, the Company believes that Class A
Stockholders who consider exercising such rights should seek the advice of
counsel. CLASS A STOCKHOLDERS WHO DESIRE TO EXERCISE THEIR APPRAISAL RIGHTS MUST
NOT SURRENDER THEIR CERTIFICATES REPRESENTING CLASS A SHARES PURSUANT TO THE
LETTER OF TRANSMITTAL AND MUST SATISFY ALL THE CONDITIONS SET FORTH IN THE
FOLLOWING PARAGRAPHS.

In order to exercise appraisal rights, a holder must deliver a written
demand for appraisal of Class A Shares to the General Counsel of the Company
within 20 days after the date of this Information Statement. The address of the
General Counsel of the Company is Contel Cellular Inc., 245 Perimeter Center
Parkway, Atlanta, Georgia 30346, Attention: General Counsel. The telephone
number of the General Counsel is (404) 804-3400.

A demand for appraisal must be executed by or for the Class A Stockholder
of record, fully and correctly, as such Class A Stockholder's name appears on
the certificate or certificates evidencing such stockholder's Class A Shares. If
the Class A Shares are owned of record in a fiduciary capacity, such as by a
trustee, guardian or custodian, such demand must be executed by the fiduciary.
If the Class A Shares are owned of record by more than one person, as in a joint
tenancy or tenancy in common, such demand must be executed by all record owners.
An authorized agent, including an agent for two or more record owners, may
execute the demand for appraisal for a Class A Stockholder of record; however,
the agent must identify the record owner and expressly disclose the fact that,
in exercising the demand, such person is acting as agent for the owner.

A record owner, such as a broker, who holds Class A Shares as a nominee for
others, may exercise appraisal rights with respect to the Class A Shares held
for all or less than all beneficial owners of Class A Shares as to which such
person is the record owner. In such case the written demand must set forth the
number of Class A Shares covered by such demand. Where the number of Class A
Shares is not expressly stated, the demand will be presumed to cover all Class A
Shares outstanding in the name of such record owner. Beneficial owners who are
not record owners and who intend to exercise appraisal rights should instruct
their record owners to comply strictly with the statutory requirements with
respect to the exercise of appraisal rights.

Within 10 days after the Effective Time, the Surviving Corporation will
notify each Class A Stockholder who has complied with Section 262 of the date
the Merger has become effective. From and after the Effective Time, dissenters
may not vote their Class A Shares or receive distributions on such Class A
Shares declared after the Effective Time.

Within 120 days after the Effective Time, but not thereafter, either the
Surviving Corporation or any Class A Stockholder entitled to appraisal rights
under Section 262 (who has notified the Company as described above within 20
days after the date of this Information Statement) may file a petition in the
Delaware Court of Chancery demanding a determination of the value of the Class A
Shares of all Class A Stockholders entitled to appraisal, provided that during
the first 60 days after the Effective Time any Class A Stockholder has the right
to withdraw his demand for appraisal and accept the cash payment of the Merger
Consideration provided for in the Merger Agreement. Within such 120 day period,
any dissenting shareholder who has perfected his or her rights may, by written
request to the Surviving Corporation, obtain a list of the aggregate number of
holders of Class A Shares for which appraisal demands have been received. Such
list must be delivered by the Surviving Corporation to the requesting
Stockholder within 10 days of the date on which the request is received by the
Surviving Corporation or the expiration of the period for delivery of demands
under Section 262(d) of the DGCL, whichever is later.

27
<PAGE> 29

Within 20 days after the service upon the Surviving Corporation of a copy
of a petition filed in the Delaware Court of Chancery demanding an appraisal,
the Surviving Corporation is obligated to file in the office of the Register in
Chancery a verified list of all Class A Stockholders who have demanded appraisal
and have not reached agreement as to the value of their Class A Shares with the
Surviving Corporation or withdrawn the demand for appraisal of their Class A
Shares. After notice to such Class A Stockholders, the Court of Chancery is
empowered to conduct a hearing upon the petition of any such Class A
Stockholder. The court shall then determine those Class A Stockholders entitled
to appraisal and appraise the fair value of the Class A Shares held by them,
exclusive of any element of value arising from the accomplishment or expectation
of the Merger, together with a fair rate of interest to be paid, if any, upon
the amount determined to be the fair value. In determining fair value, the Court
of Chancery is to take into account all relevant factors. In Weinberger v. UOP
Inc., et al., decided February 1, 1983, the Delaware Supreme Court discussed the
considerations that could be considered in determining fair value in an
appraisal proceeding, stating the "proof of value by any techniques or methods
which are generally considered acceptable in the financial community and
otherwise admissible in court" should be considered and that "fair price
obviously requires consideration of all relevant factors involving the value of
a company". The Delaware Supreme Court stated that in making this determination
of fair value the court must consider market value, asset value, dividends,
earnings prospects, the nature of the enterprise and any other facts which could
be ascertained as of the date of the merger which throw any light on future
prospects of the corporation. Section 262 provides that fair value is to be
"exclusive of any element of value arising from the accomplishment or
expectation of the merger". In Weinberger, the Delaware Supreme Court construed
Section 262 to mean that "elements of future value, including the nature of the
enterprise, which are known or susceptible of proof as of the date of the merger
and not the product of speculation, may be considered".

Class A Stockholders considering seeking appraisal should bear in mind that
the fair value of their Class A Shares determined under Section 262 could be
more than, the same as or less than the consideration they are to receive
pursuant to the Merger Agreement if they do not seek appraisal of their Class A
Shares, and that an opinion of an investment banking firm as to fairness is not
an opinion as to fair value under Section 262. Costs of the appraisal proceeding
may be taxed upon the parties thereto by the court as the court deems equitable
in the circumstances. Upon application of a dissenting stockholder, the Delaware
Court of Chancery may order that all or a portion of the expenses incurred by
any dissenting Class A Stockholder in connection with the appraisal proceeding,
including without limitation reasonable attorney's fees and the fees and
expenses of experts, be charged pro rata against the value of all Class A Shares
entitled to appraisal.

If a Class A Stockholder does not file a petition for an appraisal within
120 days after the Effective Time, then the right of such Class A Stockholder to
an appraisal shall cease. In addition, if any Class A Stockholder shall deliver
to the Surviving Corporation a written withdrawal of such holder's demand for an
appraisal and an acceptance of the Merger Consideration, either within 60 days
after the Effective Time or thereafter with the written approval of the
Surviving Corporation, then the right of such Class A Stockholder to an
appraisal shall cease. Notwithstanding the foregoing, no appraisal proceeding in
the Delaware Court of Chancery shall be dismissed as to any Class A Stockholder
without the approval of the Court, and such approval may be conditioned upon
such terms as the Court deems just.

28
<PAGE> 30

MARKET PRICES AND DIVIDENDS
ON THE COMMON STOCK OF THE COMPANY

The Class A Shares are publicly traded in the over the counter market and
quoted on the Nasdaq National Market under the symbol "CCXLA". There is no
established trading market for the Class B Shares. As of February , 1995, the
Company had 390 Class A Stockholders of record. The Company has not paid any
cash dividends on the Class A Shares or Class B Shares, and it is not
anticipated that the Company will pay any cash dividends in the foreseeable
future.

The following table indicates the high and low sales prices for the Class A
Shares during the designated periods:

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
------- ------- ------ --------
<S> <C> <C> <C> <C>
1994
High.............................. $ 18.75 $ 17.25 $24.00 $ 25.25
Low............................... 14.00 13.00 16.00 23.50

1993
High.............................. $ 18.63 $ 16.25 $18.75 $ 22.00
Low............................... 13.25 13.50 15.50 15.00

1992
High.............................. $ 23.25 $ 18.50 $16.50 $ 19.00
Low............................... 17.25 13.00 13.50 13.25
</TABLE>

On September 7, 1994, the last full day of trading prior to the
announcement of GTE's intention to acquire the Class A Shares, the high, low and
closing sales prices per Class A Share on the Nasdaq National Market were
$18.25, $17.75 and $17.75, respectively.

29
<PAGE> 31

SELECTED CONSOLIDATED FINANCIAL DATA OF THE COMPANY

The selected consolidated financial data presented below as of December 31,
1989-1993 and for each of the years then ended have been derived from the
consolidated financial statements of the Company which have been audited (except
for the number of subscribers) by Arthur Andersen LLP, independent certified
public accountants. See the "REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS" attached
as Exhibit F to this Information Statement. The selected consolidated financial
data as of September 30, 1993 and 1994 and for the nine-month periods then ended
have been derived from the unaudited consolidated financial statements of the
Company. The consolidated financial statements as of December 31, 1993 and 1992,
and for each of the years in the three-year period ended December 31, 1993, have
been incorporated by reference into this Information Statement. See
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE". This financial information
should be read in conjunction with such financial statements and notes thereto.

<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30,
YEARS ENDED DECEMBER 31,
------------------------------------------------------------ -----------------------
1989 1990 1991 1992 1993 1993 1994
-------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues and sales................... $ 65,519 $ 167,178 $ 235,107 $ 286,999 $ 374,014 $ 265,262 $ 405,069
Operating income (loss)(1)........... (14,682) (38,143) (68,577) (50,113) (28,305) (12,536) 35,262
Loss from consolidated operations.... (12,328) (158,865) (223,726) (196,347) (188,011) (136,253) (101,794)
Equity in earnings of unconsolidated
partnerships....................... 17,539 19,069 15,687 29,027 37,351 27,864 48,510
Gains on sales of partnership
interests.......................... -- -- 18,387 60,806 48,023 8,326 76,348
Net income (loss) before cumulative
effect of change in accounting
principles......................... 2,621 (102,794) (118,900) (73,061) (74,918) (70,382) 6,360
Cumulative effect of change in
accounting principles(2)........... -- -- -- (2,080) (241) -- --
Net income (loss).................... 2,621 (102,794) (118,900) (75,141) (75,159) (70,382) 6,360
Net income (loss) per share before
cumulative effect of change in
accounting principles.............. 0.03 (1.03) (1.19) (0.73) (0.75) (0.70) 0.06
Net income (loss) per share.......... 0.03 (1.03) (1.19) (0.75) (0.75) (0.70) 0.06
Weighted average shares outstanding
(in thousands)..................... 99,983 99,931 99,942 99,947 99,949 99,949 99,951
OTHER OPERATING DATA:
Capital expenditures................. 31,871 70,841 107,792 183,504 130,042 81,377 139,345
Ending subscribers................... 50,050 155,285 236,282 327,645 521,226 434,338 672,560
</TABLE>

<TABLE>
<CAPTION>
AS OF
AS OF DECEMBER 31, SEPTEMBER 30,
------------------------------------------------------------ -----------------------
1989 1990 1991 1992 1993 1993 1994
-------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets......................... $207,186 $1,665,395 $1,870,669 $1,930,469 $2,052,984 $1,979,987 $2,175,701
Long-term obligations
Notes payable -- affiliates........ -- 1,540,000 1,735,034 1,814,327 1,901,726 1,906,191 2,011,613
Other.............................. 14,280 14,280 42,280 36,280 36,792 30,280 30,792
Stockholders' equity (deficit)....... 130,166 27,525 (91,085) (166,084) (241,221) (236,444) (234,820)
Book value per share................. 1.30 0.28 (0.91) (1.66) (2.41) (2.37) (2.35)
</TABLE>

- ---------------
(1) The operating loss in 1991 includes approximately $12 million of integration
costs associated with the merger of Contel with a wholly owned subsidiary of
GTE.

30
<PAGE> 32

PROJECTED CONSOLIDATED FINANCIAL DATA OF THE COMPANY(1)

The Company does not, as a matter of course, publicly disclose projections
as to future revenues or earnings. The following five year projections for the
period 1995-1999 were prepared by management for internal planning purposes.
These five year projections are included in this Information Statement because
such projections were made available to the Special Committee, its financial
advisor, GTE and the GTE Financial Advisors. These projections, while presented
with numerical specificity, are based upon a variety of estimates and
assumptions. Such estimates and assumptions, some of which are described below,
involve judgments with respect to, among other things, future economic and
competitive conditions, the ability of the Company to continue operations, and
future business decisions. These judgments, though considered reasonable by the
Company at the time, may not be realized, and are inherently subject to
significant business, economic and competitive uncertainties, many of which are
beyond the control of the Company.

There can be no assurance that the results of operations set forth in such
projections will be realized. Actual results may vary materially from those
shown. In light of the uncertainties inherent in projections of any kind, the
inclusion of projections herein should not be regarded as a representation by
the Company or any other person that the projections will be achieved. The
Company's independent auditors have not examined or compiled the projections
presented herein and accordingly, assume no responsibility for them. Class A
Stockholders are cautioned not to place undue reliance on these projections.
Management has not and does not intend to update or otherwise revise the
projections to reflect changing circumstances existing after the preparation of
the projections included herein or to reflect the occurrence of unanticipated
events that may have occurred.

The significant assumptions underlying these projections are described in
the footnotes following the projections. The projections provided to the Special
Committee, its financial advisor and the GTE Financial Advisors were based on
forecasted results for 1994 since actual 1994 results were not available at the
time.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,(1)
------------------------------------------
1995 1996 1997 1998 1999
------ ------ ------ ------ ------
(DOLLAR AMOUNTS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Service revenues(2)................................... $ 679 $ 831 $ 984 $1,140 $1,282
Depreciation and amortization(3)(4)................... 152 181 201 215 228
Operating income...................................... 116 186 263 325 431
Net income (loss)(5).................................. (36) (1) 40 81 153

OTHER OPERATING DATA:
Capital expenditures(3)............................... 298 220 158 135 145
Operating cash flow................................... 268 367 464 540 659
</TABLE>

31
<PAGE> 33

<TABLE>
<CAPTION>
AS OF DECEMBER 31,(1)
------------------------------------------
1995 1996 1997 1998 1999
------ ------ ------ ------ ------
(DOLLAR AMOUNTS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets.......................................... $2,541 $2,614 $2,602 $2,548 $2,488
Long-term liabilities(6).............................. 2,135 2,183 2,233 2,185 1,983
Stockholders' deficit(7).............................. (289) (290) (250) (169) (16)
</TABLE>

- ---------------
(1) Basis of presentation: The five year projections do not include the effect
of the proposed Merger. The five year projections include the effect of the
1994 acquisitions of 100% of the cellular system serving the Huntsville,
Alabama MSA and Alabama RSA 2, a controlling interest in a company with
interim operating authority to provide cellular service in Alabama RSA 1 and
the acquisition of a controlling interest in California RSA 4. Prior to
preparation of these five year projections, ten year projections were
prepared that did not include the effects of the acquisitions referred to
above. These ten year projections were prepared outside of the Company's
normal planning process and therefore, in addition to being inherently less
certain, they received less management review than the five year
projections. The ten year projections, as presented below, were made
available to the Special Committee, its financial advisor and the GTE
Financial Advisors. Both the ten year and five year projections include the
effect of the proposed sales in 1994 of certain properties to NYNEX Mobile
Communications Company, including the Company's cellular interests in the
MSAs of Binghamton and Elmira, New York, and New York RSA 3. These sales are
expected to close sometime in 1995. Additionally, the California RSA 4
acquisition is not expected to close until sometime in 1995.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
(DOLLAR AMOUNTS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Service revenues......... $ 656 $ 799 $ 945 $1,092 $1,228 $1,270 $1,287 $1,285 $1,315 $1,347
Depreciation and
amortization........... 148 176 196 210 223 233 248 270 294 315
Operating income......... 103 182 257 316 421 432 425 411 408 404
Net income (loss)........ (37) 4 43 83 154 181 198 215 239 266

OTHER OPERATING DATA:
Capital expenditures..... 298 214 156 134 143 123 135 127 126 100
Operating cash flow...... 251 358 453 526 644 665 673 681 702 719
</TABLE>

(2) Service revenues: Service revenues include airtime, access, roaming,
long-distance and other service revenues, but do not include revenues for
the sale or rental of cellular equipment. The projections generally assume
that service revenues will increase over prior years due to increasing
volumes; however, revenue per subscriber will continue to decline as an
increasing number of casual users are added to the base and as new entrants
in the wireless communication market compete for subscribers.

(3) Capital expenditures/depreciation: The projections assume that increased
capital will be required to provide high quality, portable network coverage,
to accommodate volume and provide for economies of scale.

(4) Amortization: The five year projections include the amortization of
intangibles related to the acquisitions described in Note 1 above.

(5) Net income: The projections assume a federal income tax rate of 35% for all
periods presented.

(6) Long term liabilities: The projections assume increases in long-term debt
between 1995 and 1997 reflecting the expected increase in required capital
as described in Note 3. Thereafter, the projections assume that operating
cash flow will be sufficient to satisfy operating requirements and capital
expenditures and enable the Company to gradually repay outstanding debt.

(7) Stockholders' deficit: Stockholders' deficit includes the par value of the
Class A Shares and Class B Shares, additional paid-in capital, the cost of
the Class A treasury stock and the accumulated deficit all as of December
31, 1993, adjusted for the projected net results for the year ended December
31, 1994 and for each of the years included in the above projections.

32
<PAGE> 34

BUSINESS OF THE COMPANY

OVERVIEW

The Company's 23.9 million POPs include cellular systems which the Company
controls or manages and cellular systems operated by partnerships in which the
Company is not the controlling partner. As of December 31, 1994, approximately
19.5 million of the Company's 23.9 million POPs were located in 59 MSAs. The
Company owned a controlling interest in and managed cellular systems servicing
32 of these 59 MSAs (representing approximately 69% of the Company's MSA POPs).
The Company owned a non-controlling interest in cellular systems servicing the
remaining 27 MSAs.

CELLULAR INTERESTS

The Company's controlled MSA interests, non-controlled MSA interests,
controlled RSA interests, managed RSA interests and non-controlled RSA
interests, are set forth below.

33
<PAGE> 35

<TABLE>
<CAPTION>
COMPANY COMPANY
PERCENTAGE 1994 ESTIMATED POPULATION
MARKET MSA RANK OWNERSHIP POPULATION(1) EQUIVALENTS
- ------------------------------------------- -------- ---------- -------------- -----------
<S> <C> <C> <C> <C>
Clarksville, TN............................ 209 100.00% 172,410 172,410
Tuscaloosa, AL............................. 222 80.40% 161,333 129,705
Florence, AL............................... 226 91.09% 138,073 125,771
Petersburg, VA............................. 235 95.01% 130,585 124,069
Anniston, AL............................... 249 100.00% 116,063 116,063
Gadsden, AL................................ 272 90.00% 101,153 91,038
Elmira, NY................................. 284 100.00% 95,612 95,612
Las Cruces, NM............................. 285 100.00% 153,838 153,838
Owensboro, KY.............................. 293 88.87% 89,993 79,977
-------------- -----------
32 TOTAL CONTROLLED MSAs.................................. 14,350,031 13,511,590
=========== =========
NON-CONTROLLED MSA INTERESTS
Los Angeles, CA............................ 2 11.20% 14,718,542 1,648,477
San Francisco, CA.......................... 7 11.25% 3,832,050 431,106
Washington, DC............................. 8 35.27% 3,783,479 1,334,433
Houston, TX................................ 10 4.40% 3,897,637 171,496
Minneapolis, MN............................ 15 30.00% 2,569,391 770,817
San Jose, CA............................... 27 11.25% 1,541,573 173,427
San Antonio, TX............................ 33 30.00% 1,382,982 414,895
Sacramento, CA............................. 35 0.98% 1,479,697 14,501
Jacksonville, FL........................... 51 14.24% 1,003,832 142,946
Greenville, SC............................. 67 10.83% 667,011 72,237
Oxnard, CA................................. 73 11.20% 697,369 78,105
Austin, TX................................. 75 3.00% 874,277 26,228
Albuquerque, NM............................ 86 49.00% 590,335 289,264
Beaumont, TX............................... 101 4.40% 384,136 16,902
Stockton, CA............................... 107 0.98% 517,135 5,068
Vallejo, CA................................ 111 11.25% 489,096 55,023
Santa Rosa, CA............................. 123 11.25% 411,058 46,244
Santa Barbara, CA.......................... 124 39.00% 378,431 147,588
Salinas, CA................................ 126 11.25% 372,027 41,853
Modesto, CA................................ 142 0.98% 415,482 4,072
Galveston, TX.............................. 170 4.40% 237,243 10,439
Reno, NV................................... 171 0.98% 279,735 2,741
Santa Cruz, CA............................. 174 11.25% 230,417 25,922
Chico, CA.................................. 215 0.98% 197,623 1,937
Anderson, SC............................... 227 10.83% 146,845 15,903
Redding, CA................................ 254 0.98% 167,321 1,640
Yuba City, CA.............................. 274 0.98% 135,636 1,329
-------------- -----------
27 TOTAL NON-CONTROLLED MSAs.............................. 41,400,360 5,944,593
=========== =========
59 TOTAL MSAs............................................. 55,750,391 19,456,183
=========== =========
</TABLE>

34
<PAGE> 36

<TABLE>
<CAPTION>
COMPANY COMPANY
PERCENTAGE 1994 ESTIMATED POPULATION
MARKET OWNERSHIP POPULATION(1) EQUIVALENTS
- ------------------------------------------------------- ---------- -------------- -----------
<S> <C> <C> <C>
CONTROLLED RSA INTERESTS
Alabama 2.............................................. 100.00% 127,611 127,611
California 6........................................... 100.00% 28,183 28,183
California 9........................................... 100.00% 140,612 140,612
Kentucky 2............................................. 100.00% 127,813 127,813
Kentucky 7............................................. 100.00% 166,424 166,424
Tennessee 1............................................ 100.00% 297,449 297,449
Tennessee 2............................................ 100.00% 159,071 159,071
Tennessee 3............................................ 100.00% 329,746 329,746
Tennessee 5............................................ 100.00% 336,480 336,480
Tennessee 6............................................ 100.00% 156,906 156,906
Tennessee 7............................................ 100.00% 248,005 248,005
Tennessee 9............................................ 100.00% 67,581 67,581
Virginia 7............................................. 100.00% 38,853 38,853
Virginia 8............................................. 95.01% 84,513 80,296
Virginia 9............................................. 95.01% 87,028 82,685
Virginia 11............................................ 95.01% 111,650 106,079
Virginia 12............................................ 95.01% 33,536 31,863
California 12.......................................... 92.00% 110,515 101,674
Illinois 1............................................. 91.50% 316,168 289,294
Virginia 5............................................. 77.00% 63,347 48,777
Texas 10............................................... 75.00% 29,489 22,117
New Mexico 6-I......................................... 71.43% 60,988 43,564
Virginia 3............................................. 51.00% 183,153 93,408
Virginia 4............................................. 51.00% 66,772 34,054
-------------- -----------
24 TOTAL CONTROLLED RSAs................................. 3,371,893 3,158,545
=========== =========
MANAGED, NON-CONTROLLED RSA INTERESTS
Kentucky 1............................................. 50.00% 187,079 93,540
New Mexico 3........................................... 50.00% 78,980 39,490
New Mexico 5........................................... 43.00% 56,850 24,446
Iowa 4................................................. 38.10% 155,924 59,407
Indiana 7.............................................. 38.09% 220,819 84,119
Indiana 8.............................................. 38.09% 252,283 96,105
Indiana 9.............................................. 38.09% 142,859 54,421
New York 3............................................. 22.50% 492,406 110,791
California 4........................................... 20.83% 338,983 70,610
Iowa 5................................................. 14.29% 108,063 15,442
-------------- -----------
10 TOTAL MANAGED RSAs.................................... 2,034,246 648,371
=========== =========
</TABLE>

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<PAGE> 37

- ---------------
(1) Population figures are derived from the 1994 Donnelly marketing population
estimates for counties comprising FCC defined MSAs and RSAs. POP figures
discussed in "SPECIAL FACTORS -- Opinion of Financial Advisor to the
Special Committee" and "SPECIAL FACTORS -- Opinions of Financial Advisors
to GTE" are based on 1993 population estimates which differ, although not
materially in the aggregate, from the figures set forth in the table above.

THE CELLULAR TELEPHONE INDUSTRY

Background. In 1983, the Federal Communications Commission (the "FCC")
issued the first license to provide cellular telephone service in the United
States. Since that time, cellular telephone service has become available to all
305 MSAs and 428 RSAs and is available to most of the population of the United
States.

Cellular telephone service was developed as a response to the shortcomings
of conventional mobile telephone systems. By providing high quality, high
capacity communication to and from vehicle-mounted telephones ("mobiles") and
hand-held radio telephones ("portables"), the cellular telephone industry has
grown at a very rapid pace and, as of year-end 1994, exceeded 22 million
subscribers. In 1994, the cellular telephone industry recorded an overall growth
rate of approximately 37%.

Technology. Cellular telephone service achieves its high quality and
capacity capability by dividing the radio spectrum allocated to it by the FCC
into smaller groups or "sets" of frequencies and re-using those frequencies many
times in geographically distant parts of the network. Each set of frequencies is
allocated to a specific geographic area called a "cell." Adjacent cells must use
a different set of frequencies to avoid cell-to-cell frequency interference.
Cells which are sufficiently distant from one another may use the same
frequencies because the radio signals naturally decay over distance until they
reach a low enough level that does not cause interference. Therefore, by use of
frequency planning techniques, the radio spectrum allocated to a cellular

36
<PAGE> 38

provider can be re-used many times in various parts of the system to achieve
high overall call capacities and very low call interference rates.

The cells in a system are connected to a computer-controlled switch called
a mobile telephone switching office ("MTSO"). The MTSO monitors all calls to all
cell sites within the system and routes them to their intended destinations.
Once a call request is received, it is directed to the cell site where the
signal strength is greatest, and is then continuously monitored for quality
signal strength. If the signal strength begins to decline as a vehicle travels
through the radio coverage area of one cell, the MTSO recognizes the cell which
is getting weaker in signal strength and which is the next cell in the path of
the vehicle where signal strength is increasing. At the appropriate point in
time, the MTSO instructs the new cell to take over the call and the original
cell to release the call. This allows an in-process call to achieve a
cell-to-cell handoff with no interruption in the conversation. The MTSO is
capable of achieving this handoff as many times as necessary for each call.

Today's cellular systems utilize digital switching equipment, digital
connections between the switch and the cells, and analog radio frequency ("RF")
technology between the cells and the mobile units. The analog RF technology is
limited because a finite number of channels can be used at any one cell within a
system without causing system problems. The capacity of the system can be
increased in areas with heavy call traffic by either cell splitting or cell
sectoring. Cell splitting involves constructing numerous cells to serve the
coverage area of the original cell. If a large cell is split into four smaller
cells, the total channels available within the original coverage area is
increased up to four times. Cell sectoring is accomplished by replacing a cell's
omni-directional antennas with either three or six directional antennas. This
allows for different sets of channels to be used in each sector. The advantage
of this method is that capacity can be increased in the cell without increasing
system interference and that the same frequency sets can be reused at closer
spacing.

The cellular telephone industry is moving toward implementing digital RF
technology in existing cellular systems. Two technologies are currently under
consideration by major cellular providers -- Time Division Multiple Access
("TDMA") and Code Division Multiple Access ("CDMA"). Either technology will
offer a considerable capacity increase over today's technology.

Market Structure. Historically, FCC regulations provided that licenses
would be granted to two cellular service providers in each MSA and RSA; a
wireline licensee and a non-wireline licensee. Each of the two licensees has 25
MHz of radio spectrum allocated to it, and each further subdivides this spectrum
into 415 two-way channels. Each license is granted for a period of ten years and
is subject to renewal at the end of that period. FCC rules require all cellular
system operators to provide, on a nondiscriminatory basis, cellular service to
resellers who may purchase blocks of numbers at a wholesale rate and resell such
service to the public.

The FCC is in the process of auctioning additional licenses for the
provision of personal communications services in the 1.8 GHz to 1.99 GHz
frequency band. These auctions will not be completed until later this year and
will result in new licensees in each of the Company's service areas. No licenses
have been awarded as of February , 1995.

THE COMPANY'S CELLULAR OPERATIONS

General. The Company, or partnerships which the Company controls or
manages, provides cellular service in 32 MSAs and 34 RSAs ("Company Controlled
Systems" or "Company Controlled Markets"). Company Controlled Systems represent
approximately 72% of the Company's total POPs. The information provided below
with respect to the Company's cellular operations applies only to the Company
Controlled Systems because these are the only systems whose operations the
Company controls. The Company's non-controlled cellular interests are described
below in "BUSINESS OF THE COMPANY -- Non-Controlled Systems".

The Company obtained the right to provide cellular service in the Company
Controlled Markets either (i) as the result of the FCC's licensing process, or
(ii) through an acquisition program. Since the Company was an affiliate of a
wireline telephone company, it had the right to apply for the wireline cellular
license in any

37
<PAGE> 39

area served by its landline affiliate. As a result of this licensing process,
the Company is the wireline licensee in 43 Company Controlled Markets
(approximately 8.7 million POPs). As a result of its acquisition program, the
Company is the non-wireline licensee in 23 Company Controlled Markets
(approximately 8.6 million POPs).

In acquiring and developing these cellular telephone systems, the Company
has utilized a strategy of focusing on coastal and sun belt areas where the
Company believes the demographics and business climate are favorable to the
development of cellular systems. In addition, the Company has attempted to
develop cellular systems in regional clusters of significant size.

The cellular telephone systems originally licensed to the Company as part
of the FCC licensing process for MSAs and RSAs are generally located in 5
geographic areas: Virginia, California, the Midwest, Texas/New Mexico, and the
Gulf of Mexico. The cellular telephone systems acquired by the Company are
located in Tennessee, Alabama and Kentucky.

Acquisitions and Divestitures. To further its strategy of acquiring and
developing large regional clusters in economically strong areas, the Company has
developed and followed a program of selling certain properties which are not
strategically located and purchasing certain other properties which are
strategic.

In January 1994, the Company purchased 100% of the cellular system serving
Tennessee RSA 2 and the remaining 51% interest in Tennessee RSA 3. In December
1994, the Company announced that it had completed the purchase of 100% of the
cellular system serving the Huntsville, Alabama MSA and Alabama RSA 2 as well as
an 80% controlling interest in an entity that has interim operating authority to
provide service in Alabama RSA 1. Also, during the third quarter of 1994, the
Company executed a definitive agreement to purchase an additional 29.2% interest
in California RSA 4. The California purchase is subject to certain regulatory
approvals.

During 1994, the Company also completed the sales of certain properties, as
part of the definitive agreement reached with NYNEX Mobile Communications
Company ("NYNEX") in December of 1993 (the "NYNEX Agreement"). To date, the
Company has completed the sale of its 60% interest in the cellular system
serving the Manchester, New Hampshire MSA, 36.6% interest in New Hampshire RSA
2, 100% interest in the Burlington, Vermont MSA, 83.3% interest in Vermont RSAs
1 and 2 and 25% interest in New York RSA 2. The NYNEX Agreement also provides
for the sale of the Company's cellular interests in the MSAs of Binghamton and
Elmira, New York, New York RSA 3, Pennsylvania RSA 3 and Pennsylvania RSA 4. The
completion of the sale of these properties is subject to final regulatory
approval.

Additional sales completed during 1994 include 100% of Oregon RSA 5, 100%
of Kentucky RSA 11, 100% of California RSA 7, 33.3% of Alabama RSA 1, 50% of
North Carolina RSA 1, 7.1% of Iowa RSA 1, 16.7% of Iowa RSA 8, 5.6% of Iowa RSA
14, 33.3% of South Dakota RSA 5 and 14.3% of South Dakota RSA 6.

The transactions described above have resulted or will result when
completed in a net decrease in the Company's POPs of approximately 0.9 million.

Operations

Partnerships. A substantial number of the Company's cellular systems in
MSAs are owned by limited partnerships in which the Company is a general partner
("MSA Partnerships"). Most of these partnerships are governed by partnership
agreements with similar terms, including, among other things, customary
provisions concerning capital contributions, sharing of profits and losses, and
dissolution and termination of the partnership. Most of these partnership
agreements vest complete operational control of the partnership with the general
partner. The general partner typically has the power to manage, supervise and
conduct the affairs of the partnership, make all decisions appropriate in
connection with the business purposes of the partnership, and incur obligations
and execute agreements on behalf of the partnership. The general partner also
may make decisions regarding the timing and amount of cash contributions and
distributions, and the nature, timing and extent of construction, without the
consent of the other partners. The Company owns more than fifty percent (50%) of
almost all of the MSA Partnerships.

38
<PAGE> 40

A substantial number of the Company's cellular systems in RSAs are also
owned by limited or general partnerships in which the Company is either the
general or managing partner (the "RSA Partnerships"). These partnerships are
governed by partnership agreements with varying terms and provisions. In many of
these partnerships, the noncontrolling partners have the right to vote on major
issues such as the annual budget and system design. In addition, in certain of
these partnerships, the partners have the right to build, under certain
circumstances, independent cells in areas of the RSA not served by the
partnership. Finally, in a few of these partnerships, the Company's management
position is for a limited term (similar to a management contract) and the other
partners in the partnership have the right to change managers, with or without
cause. The Company owns less than fifty percent (50%) of many of the RSA
Partnerships.

The partnership agreements for both the MSA Partnerships and RSA
Partnerships generally contain provisions granting all partners a right of first
refusal in the event a partner desires to transfer a partnership interest. This
restriction on transfer can make these partnership interests difficult to sell
to a third party.

Provision of Services by GTE Personal Communications Services. During
1993, the Company maintained a headquarters staff and two regional staffs which
provided strategic as well as day-to-day operational support to the Company's
operations in its 66 Company Controlled Markets. In 1994, the Company
implemented a new organizational structure pursuant to which the two regional
staffs were replaced with eight area staffs which are located in the Company's
eight clusters of MSAs and RSAs. These eight areas are Virginia, Tennessee,
Kentucky, Alabama, the Midwest, Texas/New Mexico, the Gulf of Mexico and
California. The purpose of this reorganization was to move essential, customer
impacting resources closer to the marketplace to enhance the Company's
competitive advantage and position the Company for future growth.

The Company also receives general and administrative as well as functional
support from GTE Personal Communications Services ("GTE PCS"), a division of
GTE. Pursuant to the Services Agreement, GTE PCS provides finance, accounting,
tax, human resources, legal, regulatory and information management services to
the Company. The Services Agreement provides that the Company is allocated a
portion of GTE PCS expenses based on a two-step process. The first step is the
designation of GTE PCS expenses as cellular or non-cellular. The second step is
the allocation of cellular expenses between the Company and GTE Mobilnet (a GTE
subsidiary also engaged in the cellular communications business) based on a
cost-causative allocation methodology. Under this methodology, pools of costs
are allocated to operating units based on one of several factors. The factors
were developed and applied to cost categories in an effort to allocate the cost
to areas in proportion to the use and benefit of the cost. Under this Services
Agreement, the Company was allocated approximately 34% of GTE PCS's cellular
expenses for the twelve months ended December 31, 1994. See "RELATED PARTY
TRANSACTIONS -- Arrangements and Transactions with Contel and GTE".

Construction and Maintenance. The construction and maintenance of cellular
systems is capital intensive. Although all of the Company's MSA and RSA systems
were operational in 1994, the Company continually adds cells to increase
coverage, provide additional capacity and improve the quality of these systems.
In 1994, the Company completed construction of 153 new cells in Company
Controlled Systems. In addition the Company completed a replacement program for
most of its older technology cell site equipment. The newer technology equipment
provides higher quality and increased flexibility in providing analog services,
as well as positions a platform that supports deployment of future digital
technologies. Total capital expenditures related to Company Controlled Systems
were approximately $253 million in 1994 and are anticipated to be approximately
$315 million in 1995.

Marketing

General. The Company markets its cellular telephone services through
several distribution channels, including independent agents, its direct sales
force and retail outlets. Agents are independent contractors who solicit
customers on a commission basis exclusively for the Company. The Company's
agents are diverse in size and type of business. Most are agents for the Company
within a limited geographic area, while a few agents sell the Company's cellular
service regionally or nationally. Some of the Company's agents sell cellular
products and services exclusively, while others sell a variety of products (such
as radio and electronics

39
<PAGE> 41

equipment). Finally, some of the Company's agents are small shops, while others
are large retail stores. The Company's agents generally receive a commission
payment for each cellular subscriber they add to the Company's systems.

The Company's direct sales force is made up of sales people who are
employees of the Company and are compensated on an incentive basis. These
employees earn a portion of their compensation as a guaranteed salary and
receive additional payments for each subscriber added. These employees are
required to meet certain quotas set by the Company. Another distribution channel
utilized by the Company is retail outlets, including kiosks and retail stores.
The retail outlets are staffed by salaried employees, part-time employees and
temporary employees who receive a base salary and incentive compensation for
each unit sold. Finally, the Company is constantly attempting to develop new
distribution channels, including telemarketing, co-promotions with various other
industry leaders and door-to-door sales.

National Industry Alliance. During the past several years, cellular
providers have been forming industry alliances to market cellular service
nationwide. Many cellular providers holding non-wireline licenses have become
Cellular One(R) franchisees. Many cellular providers holding wireline licenses
have joined a consortium to market under the brand name, MobiLink(R). Because
the Company holds both wireline and non-wireline licenses, it participates in
both of these alliances.

The Company has executed franchise agreements with the Cellular One Group
for each of its non-wireline markets pursuant to which the Company obtained the
right to market its services under the Cellular One name. In return, the Company
is obligated to meet certain standards for service and customer satisfaction.
The Company is also obligated to pay an annual license fee equal to $.02 per POP
and an annual marketing fee of up to $.05 per POP in each market where the
Company uses this name.

The Company has also executed agreements with B-Side Carriers L.P. for its
wireline properties to be MobiLink providers. MobiLink service: (i) allows
people to more easily make and receive calls using standardized dialing codes in
major metropolitan areas, (ii) provides 24-hour customer service, (iii) provides
service centers for repairs and loaner phones and (iv) provides an extensive
customer satisfaction guarantee. The cost of being a MobiLink provider is equal
to $.065 per POP per year for each market where the Company has chosen to be a
MobiLink provider. GTE Mobile is an equity owner in B-Side Carriers L.P. See
"RELATED PARTY TRANSACTIONS -- Equity Ownership in B-Side Carriers L.P."

Subscribers

Total Number. The Company had 789,580 subscribers at December 31, 1994, an
increase of 51.5% over its subscribers at December 31, 1993. The Company's
subscribers at December 31, 1994 were distributed as follows: 33% in Tennessee,
21% in Virginia and 46% in all other markets combined.

Cost of Acquisition. The sales and marketing costs of obtaining new
subscribers are substantial. The Company not only has to pay for advertising,
but also incurs a direct expense for most new subscribers, either in the form of
a commission payment to an agent or a salary/incentive payment to a direct sales
person. In addition, the Company periodically runs promotions which discount the
cost of cellular telephone equipment, or provide some amount of initial access
or airtime free to new subscribers. Each of these promotions results in costs to
the Company. Although the Company has continued to lower the cost of acquisition
per subscriber, it remains one of the Company's single largest expenses.

Churn. A factor common throughout the cellular industry is that many
subscribers either completely discontinue cellular service or switch from one
cellular provider to another. In 1994, this monthly turnover or "churn" in the
Company's subscribers averaged 2.7% of all subscribers per month.

Subscriber Revenue. The Company charges its subscribers for access to its
systems, for minutes of use and for enhanced services, such as voice mail and
Mr. RescueSM. A subscriber may purchase each of these services separately for a
set price or may purchase any number of rate plans which bundle these services
in different ways. For example, a high usage subscriber may purchase a
pre-determined number of minutes of use per month for a set fee rather than pay
a fixed amount per minute. Similarly, a user who purchases cellular

40
<PAGE> 42

service for security reasons may choose a plan with a low monthly access fee but
higher per minute usage fees. Rates charged by the Company and the number and
type of rate plans vary from market to market.

The average monthly revenue the Company receives per subscriber has been
declining over the last several years. The Company believes that this industry
trend is caused in part by an increase in the number of casual and security
cellular users. The Company expects this trend to continue in 1995 and future
years.

Roaming

Roamers. The Company also provides cellular service to cellular users who
are customers of other carriers but who are visiting and wish to use their
cellular phone in the Company's service area ("roamers"). When roamers enter the
Company's service area and attempt to use their cellular phones, the Company,
through participation in an industry clearinghouse, establishes the identity and
validity of the roamer and provides cellular service. The Company then bills the
roamer's home cellular carrier for the service. Likewise, subscribers of the
Company use their cellular phones in areas outside the Company's service areas.

Roaming Revenue. The charges applicable to roamers are determined by
agreements between the Company and other carriers in the industry and vary among
markets and carriers. Roaming revenue has increased over the last several years
and for the year ending December 31, 1994 represented approximately 18.6% of the
Company's total service revenues. This increase is a result of the higher number
of cellular subscribers nationwide and the Company's larger service areas due to
an increasing number of cell sites. The Company believes that roaming will
become more frequent in future years due to advances in intelligent networking
which will simplify roaming procedures and make roaming transparent to the
roamer.

Roamer Fraud. Roamer fraud remains a cellular industry problem. Roamer
fraud occurs when cellular telephone equipment is programmed to conceal the true
identity and location of the user. While the Company and the industry have
implemented an extensive fraud control process, they have not been able to
eliminate fraud altogether.

Employees

At December 31, 1994, the Company had 2,387 employees. Of these, 230 were
employed in the Company's headquarters offices in Atlanta and the remaining
2,157 were employed throughout the Company's Controlled Markets.

NON-CONTROLLED SYSTEMS

The Company participates as a non-controlling general or limited partner in
27 MSAs and 18 RSAs. These interests represent approximately 28% of the
Company's total POPs and are typically limited partnership interests in
partnerships providing cellular service to the larger MSAs, such as Los Angeles,
San Francisco, Washington D.C., Minneapolis and Houston. The partnership
agreements which govern these partnerships are similar to those described under
the heading, "BUSINESS OF THE COMPANY -- Operations -- Partnerships". Since
these partnership agreements vest the power to manage, supervise and conduct the
affairs of the partnership with someone other than the Company, there can be no
assurance that decisions made by these partnerships would be the same as those
made by the Company under similar circumstances.

INTERNATIONAL INTERESTS

The Company owns a 10% interest in a corporation which provides cellular
service in the Sonora and Sinaloa regions of Mexico. The Company currently
receives services related to international ventures from GTE PCS.

COMPETITION

The cellular telephone industry is part of the much broader
telecommunications industry. Direct competition is in the form of the other
cellular licensee in any given market. Competition between the two

41
<PAGE> 43

cellular licensees is principally on the basis of service quality, price and
coverage area. In addition to the direct cellular competitor in each market,
there will also be competition from newly emerging Enhanced Specialized Mobile
Radio ("ESMR") operators who generally provide dispatch and other private radio
systems. With new digital technology it may be possible for ESMR operators to
provide services in the future that may be difficult to distinguish from
traditional cellular service.

In 1993 the FCC announced that it would license additional frequencies in
the 1.8 GHz to 1.99 GHz frequency band to enable up to six additional wireless
competitors to enter each market. These new licenses consist of two licenses in
each of 51 large, often multi-state, geographical areas known as Major Trading
Areas ("MTAs") and four licenses in each of 492 smaller geographical areas known
as Basic Trading Areas ("BTAs"). Auctions for such licenses began in 1994 and
will continue in 1995. As of February , 1995, no licenses were awarded under
this process. The service offerings under the additional frequencies will be
similar in nature to cellular service and will offer direct competition once
established.

REGULATION

General. The FCC regulates the licensing, construction, operation, sale
and acquisition of cellular carriers as well as interconnection arrangements
between cellular carriers. In addition, certain aspects of cellular system
operation, also may be subject to public utility regulation in the state in
which service is provided. Changes in federal or state regulation of the
Company's and its competitors' activities, such as increased rate regulation or
deregulation of interconnection arrangements, could adversely affect the
Company's results. A brief summary of federal and applicable state regulation of
cellular service is set forth below.

Federal Regulation. The FCC initially authorized cellular telephone
service in 1981 by allocating 40 MHz of spectrum for two competing cellular
systems in each market. A 20 MHz block of spectrum was given to each carrier.
Due to cellular's rapid growth, the FCC allocated to each carrier an additional
5 MHz of spectrum in 1986.

The initial cellular licenses granted by the FCC expire ten years from
their date of issuance and are renewable upon application to, and approval by,
the FCC. The FCC has established the criteria under which existing licensees may
have their cellular licenses renewed. Basically, a comparative preference will
be given to any current cellular licensee who can prove that it substantially
used its spectrum for its intended purpose, complied with applicable FCC rules,
and did not engage in substantial relevant misconduct. This preference will be
the most important factor to be considered by the FCC during its hearing on each
license renewal request in comparing the current licensee's application with any
competing applications. Failure to comply with FCC rules can be raised as an
issue during the license renewal proceedings and could result in termination of
the license.

The first of the Company's cellular licenses came up for renewal in October
1994. The Company filed renewal applications for its licenses in Mobile,
Alabama, El Paso, Texas and Richmond and Norfork, Virginia in August 1994. No
entity filed competing applications or oppositions to any of those renewal
applications. The remainder of the Company's licenses will expire over the next
several years. The Company expects to file renewal applications for such
licenses upon their expiration.

The FCC is currently in the process of auctioning additional licenses in
the 1.8 GHz to 1.99 GHz range for the provision of personal communications
services. Existing cellular companies are eligible to bid at auction for new
licenses. Existing cellular companies may bid for an MTA license where they have
no current substantial cellular holdings and one BTA license in all BTA's,
including areas where they are currently the cellular provider. A subsidiary of
GTE is bidding for licenses. No licenses have been awarded as of February ,
1995.

In addition to regulating cellular service, the FCC also regulates
point-to-point microwave facilities which are often utilized by cellular
providers to link base stations to each other and to the MTSO. The Company holds
certain microwave licenses for these purposes. Such licenses, which are issued
for a ten year period, were all renewed by the Company in 1991 for an additional
ten year period. The FCC has issued

42
<PAGE> 44

regulations pursuant to which a significant portion of the Company's microwave
licenses may have to be relocated to a higher spectrum at the request of a party
receiving a license to use such spectrum for a new technology. The regulations
currently provide that incumbent microwave licensees will be reimbursed for
expenses associated with this relocation by the new licensee.

State Regulation. In 1981, the FCC preempted the states from exercising
jurisdiction in the areas of cellular technical standards and market structure.
Under the Communications Act of 1934, as amended, however, certain aspects of
the economic regulation of common carriers were reserved to the states. The
states had exclusive jurisdiction with respect to charges, classifications,
practices and service or facilities for or in connection with intrastate
communications. Although many states have deregulated cellular service, some
still require the filing of tariffs and operational reports pursuant to statutes
governing public utilities.

In August 1994, certain provisions of the Omnibus Budget Reconciliation Act
of 1993 (the "Omnibus Act") became effective. These provisions prohibited the
states from continuing to exercise jurisdiction over rates and entry into the
wireless telecommunications business. The Omnibus Act did, however, provide that
states could file a petition with the FCC to continue rate jurisdiction. Only
two states in which the Company provides service, California and New York, filed
to continue such regulation. All states may continue to regulate other aspects
of cellular service not preempted by federal law, although it is unclear at this
time the extent to which the other states will continue to do so.

RELATED PARTY TRANSACTIONS

ARRANGEMENTS AND TRANSACTIONS WITH CONTEL AND GTE

General. The Company was initially formed as a wholly owned subsidiary of
Contel. In April 1988, a portion of the common stock of the Company was sold to
the public in a public offering. In March 1991, a wholly-owned subsidiary of GTE
merged with and into Contel (the "Contel Merger"), and Contel became a wholly
owned subsidiary of GTE. As a result of this Merger, the Company became an
indirectly held subsidiary of GTE. GTE also provided and continues to provide
cellular communications services through another subsidiary, GTE Mobilnet.

From time to time, GTE has attempted to align its legal entities and
simplify its corporate structure. As part of this process, Contel adopted a Plan
of Liquidation on January 7, 1993, pursuant to which Contel is in the process of
winding up its affairs and plans to complete its liquidation no later than
December 31, 1995.

GTE, through Contel, currently owns all of the Company's Class B Shares,
which constitute approximately 90% of the Company's outstanding capital stock.
As a result of the disproportionate voting rights between Class A Shares and
Class B Shares (one vote for each Class A Share compared with five votes for
each Class B Share), GTE controls approximately 98% of the combined voting power
of both classes of the Company's capital stock. The Class B Shares are
convertible at any time into Class A Shares on a one to one basis. Nine of the
directors of the Company are currently executive officers or directors of GTE or
the Company. Based on its current ownership of greater than 50% of the capital
stock of the Company, GTE has the ability, without the approval of the Class A
Stockholders, to effect the Merger.

The Company, Contel and GTE have a number of financial, operating and other
arrangements and have engaged in certain transactions believed to be of mutual
benefit. The terms of these arrangements have been established by Contel and GTE
in consultation with the Company but are not the result of arms-length
negotiations. The following is a summary of the principal arrangements and
transactions among the Company, Contel and GTE.

Taxes. The Company and GTE have a tax sharing arrangement under which the
Company and its subsidiaries are included in the consolidated federal income tax
returns and in certain state income and franchise tax returns of GTE. Tax
payments, if applicable, are made by the Company to GTE on a quarterly basis
using methods prescribed by GTE. When the Company and its subsidiaries generate
a federal tax loss or excess credits (credits exceeding tax liability), the
Company is reimbursed by GTE on a quarterly basis based on the actual loss or
credit which may be utilized in the consolidated GTE federal tax returns.

43
<PAGE> 45

With respect to states permitting unitary or combined tax filings, GTE
includes the Company and its subsidiaries in its unitary or combined tax filing.
The Company pays to GTE an amount equal to the state income or franchise tax
that would have been payable by the Company or its subsidiaries if a separate
tax return had been filed.

Financing and Cash Management. During 1994, the Company relied on GTE for
its short-term and long-term cash needs. The Company's long term cash needs are
mainly the result of its acquisition in February 1990 of the cellular telephone
properties previously owned by McCaw Cellular Communications, Inc. in Kentucky,
Alabama and Tennessee (the "Southeast Properties") for approximately $1.3
billion and subsequent borrowings to pay interest on such amount. The $1.3
billion was originally funded by a loan from Contel Capital Corporation, which
at that time was a wholly owned subsidiary of Contel, which became due in July,
1991. This original loan was replaced in 1991 with (i) a $700 million loan from
GTE to the Company bearing interest at 10.47% and maturing on March 1, 1998,
(ii) a $150 million loan from GTE Finance Corporation ("GTE Finance"), a wholly
owned subsidiary of GTE, bearing interest at 9.22% and maturing on February 15,
1993 (subsequently refinanced as set forth below), and (iii) a variable rate
note from GTE bearing interest at one and one-half percentage points above GTE's
external cost of borrowing these funds. The interest rate on the notes described
in (i) and (ii) above include an additional one and one-half percentage point of
interest in excess of the interest paid by GTE for these funds.

During 1992, the Company began a program of converting a portion of its
variable rate debt, including a portion of the debt incurred in connection with
the acquisition of the Southeast Properties, to fixed rate debt. As a result of
this program, the Company entered into the following loans in 1992, 1993 and
1994: (i) a $150 million loan from GTE Finance to the Company bearing interest
at 8.38% and maturing on September 25, 1997, (ii) a $150 million loan from GTE
Finance to the Company bearing interest at 8.97% and maturing on September 27,
1999, (iii) a $200 million loan from GTE to the Company bearing interest at
8.56% and maturing on December 31, 1996, (iv) a $200 million loan from GTE to
the Company bearing interest at 8.08% and maturing on December 31, 1995, (v) a
$150 million loan from GTE Finance to the Company bearing interest at 7.71% and
maturing on February 25, 1997 and (vi) a $75 million loan from GTE Finance to
the Company bearing interest at 9.90% and maturing on August 17, 2000. The
interest rates on these loans were comparable to United States Treasury rates
plus 3% per annum at the time such loans were entered into and are the rates
which GTE believes approximate the interest rates the Company could have
obtained in the marketplace from nonaffiliated lenders. These rates exceed the
interest paid by GTE for these funds. As of December 31, 1994, the Company has
borrowed approximately $1.63 billion from GTE and GTE Finance in fixed rate
debt.

The Company fulfills its immediate cash needs with an intercompany note
from GTE (the "ICN"). The amount borrowed and the rate of interest on the ICN
fluctuate daily. As of December 31, 1994 the amount of the ICN was approximately
$495 million. During 1994, the interest rate on the ICN was the daily Prime Rate
quoted in The Wall Street Journal plus .75%, which is the interest rate which
GTE believes approximates the interest rate the Company could have obtained in
the marketplace from non-affiliated lenders and exceeds the interest paid by GTE
for these funds.

During 1994, the Company also received cash management services from GTE.

Trademark License Agreement. The Company and Contel have entered into an
agreement under which the Company has been granted a non-exclusive,
non-transferrable license and right to use the trademark, service mark and
design "CONTEL CELLULAR". This grant may be terminated at the sole discretion of
Contel and will automatically terminate if Contel no longer owns a majority of
the outstanding common stock of the Company.

General Services. During 1994, the Company received numerous services,
both primary and supplemental, from GTE PCS pursuant to the Services Agreement
between the Company and GTE Mobile. These services were also provided to GTE's
wholly owned cellular subsidiary, GTE Mobilnet, and included accounting,
finance, marketing, human resources, legal, regulatory, governmental relations,
international, engineering, network design and maintenance services. In exchange
for these services, the Company reimbursed GTE PCS for its expenses in
accordance with a cost causative allocation formula which allocated

44
<PAGE> 46

pools of costs to operating units based on one of several factors. These factors
were developed and applied to cost categories in an effort to allocate expenses
to operating units in proportion to the use and benefit of the underlying cost.
Under this Services Agreement, the Company paid GTE PCS approximately $49.8
million in 1994, which was approximately 34% of all of the expenses of GTE PCS.

Insurance. The Company and its officers, directors and employees are
insured under a master contract negotiated by GTE with a private insurance
carrier. The premium due the insurance carrier under this master policy is
allocated among all GTE subsidiaries based on the loss history, total payroll
and total number of vehicles owned by each subsidiary. The premium is paid
directly to the private insurance carrier by each subsidiary.

Competition. The Company, Contel and GTE have entered into the Competition
Agreement pursuant to which Contel and GTE have agreed that they will not engage
in the cellular business except in accordance with the terms of the Competition
Agreement. Under the Competition Agreement, GTE Mobilnet may continue to engage
in the cellular business. However, the Company has a right of first refusal with
respect to future acquisitions by GTE of cellular businesses except for (i)
acquisitions of minority interests in cellular properties held by GTE Mobilnet
and (ii) acquisitions contemplated at the time of the Contel Merger which were
specifically listed in the Competition Agreement. After the Merger is effective,
the Competition Agreement will be terminated.

Equity Ownership in B-Side Carriers L.P. GTE Mobile, an affiliate of GTE,
is an equity owner in B-Side Carriers L.P., a consortium of cellular providers
who market under the brand name MobiLink(R). The Company has an agreement with
B-Side Carriers L.P. to market its wireline properties as MobiLink providers.
See "BUSINESS OF THE COMPANY -- The Company's Cellular Operations -- Marketing".

Government Systems Contract. In 1994 the Company entered into an agreement
with GTE Government Systems Corporation ("GTE Systems") pursuant to which GTE
Systems will construct not less than 40 cell sites for the Company in 1994 and
50 cell sites in 1995. The cost to be charged the Company in 1994 will consist
of (i) an administrative fixed fee of $3.1 million, (ii) reimbursement of
materials and equipment estimated to be $7.8 million and (iii) reimbursement of
external labor costs estimated to be $3.0 million. Contract pricing in 1995 will
be agreed upon by the parties.

PAYMENTS TO OPTIONHOLDERS

Certain officers and employees of the Company are participants under the
1987 Key Employee Stock Plan of the Company (the "Option Plan"). In connection
with the Merger, the Company has offered to make cash payments to those holders
of options to purchase Class A Shares issued pursuant to the Option Plan who
agree to surrender all of their options. Each optionholder who agrees to
surrender all of his or her options will receive a cash payment for each option
cancelled, whether or not currently vested (so long as the exercise period has
not lapsed), equal to $25.50 multiplied by the number of Class A Shares subject
to such options, less the exercise price for such option.

RELATIONSHIP BETWEEN GTE DIRECTOR AND PAINEWEBBER

Mr. Richard W. Jones is a director of GTE and is also engaged as a
consultant to PaineWebber, one of GTE's financial advisors in connection with
the Merger. He receives a fixed annual fee from PaineWebber for his services.

TRANSITION ARRANGEMENTS

In order to provide a degree of continuity during the merger transition
process GTE has entered into a Transition Bonus Agreement with two executives,
Dennis L. Whipple, President and Chief Executive Officer of the Company, and
Theodore J. Carrier, Treasurer and Chief Financial Officer of the Company. If
Mr. Whipple agrees to remain with GTE from the date of the Merger until December
31, 1995 or such earlier date as the parties may determine, he will be eligible
for a transition bonus equal to 100% of the sum of his final GTE annual base
rate of pay and the average of his GTE Executive Incentive Plan ("EIP") awards
for

45
<PAGE> 47

the 1993 and 1994 plan years. If Mr. Carrier agrees to remain with GTE through
December 31, 1995, he will be eligible for a transition bonus equal to 100% of
the sum of his final GTE annual base rate of pay and the average of his EIP
awards for the 1992, 1993, and 1994 plan years. In addition, Mr. Whipple will
receive an initial bonus of $20,000. In 1995, Mr. Whipple will participate in
the 1994-1995 and 1994-1996 GTE Long-Term Incentive Plan performance bonus
cycles and the 1995-1997 cycle. If Mr. Whipple remains on the payroll to the end
of the agreed upon period then, in lieu of an award for the 1995-1997 award
cycle, he will receive an equivalent cash award prorated to December 31, 1995.

Any executive officer whose employment is involuntarily terminated will
receive an enhanced retirement benefit paid out of GTE's qualified pension
assets pursuant to the terms of the GTE's Involuntary Separation Plan ("ISEP").
ISEP provides for a benefit based on length of service and/or grade level and
the benefit will not exceed 120% of one year's salary. Mr. Whipple's and Mr.
Carrier's ISEP benefits also include a non-qualified benefit attributable to
their EIP award for the three previous years.

46
<PAGE> 48

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

CERTAIN BENEFICIAL OWNERS

The following table contains certain information regarding the only persons
known to the Company as of February 15, 1994 to be beneficial owners of more
than 5% of any class of the Company's voting securities:

<TABLE>
<CAPTION>
AMOUNT OF
NAME AND ADDRESS OF BENEFICIAL PERCENTAGE
TITLE OF CLASS BENEFICIAL OWNER OWNERSHIP OF CLASS
----------------------------- ----------------------------- ---------- ----------
<S> <C> <C> <C>
Class A Common Stock......... The Capital Group, Inc. 794,000(2) 7.98%
333 South Hope Street
Los Angeles, CA 90071(1)
Class A Common Stock......... College Retirement Equities 519,200(4) 5.22%
Fund
730 Third Avenue
New York, NY 10017(3)
Class B Common Stock......... GTE Corporation 90,000,000(6) 100%
One Stamford Forum
Stamford, CT 06904(5)
</TABLE>

- ---------------
(1) This information was obtained from Amendment No. 3 to a Schedule 13G filed
with the SEC on February 10, 1994 by The Capital Group, Inc. ("Capital") on
behalf of itself and Capital Research and Management Company ("Capital
Research"). Amendment No. 3 to the Schedule 13G discloses that Capital and
Capital Research are located at the same address.

(2) Amendment No. 3 to the Schedule 13G filed by Capital and Capital Research
discloses that Capital and Capital Research share dispositive power over
these shares.

(3) This information was obtained from Amendment No. 1 to a Schedule 13G filed
with the SEC on February 15, 1994 by College Retirement Equities Fund
("CREF").

(4) Amendment No. 1 to the Schedule 13G filed by CREF discloses that CREF
exercises sole voting power and sole dispositive power over these shares.

(5) GTE acquired beneficial ownership of these shares as a result of the merger
of a subsidiary of GTE into Contel. Contel remains the holder of record of
these shares. The address of Contel is One Stamford Forum, Stamford,
Connecticut 06904.

(6) GTE, through Contel, exercises sole voting power and sole dispositive power
over these shares.

47
<PAGE> 49

DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

The number of Class A Shares owned by each director and executive officer
of the Company as of January 31, 1995 is set forth in the table below. Unless
otherwise indicated, all persons shown in the table have sole voting and
investment power with respect to the shares shown.

<TABLE>
<CAPTION>
NUMBER OF SHARES
OF CLASS A COMMON
STOCK NUMBER OF SHARES OF
BENEFICIALLY GTE COMMON STOCK
NAME OF DIRECTOR OWNED(1) BENEFICIALLY OWNED(2)
------------------------------------------------ ----------------- ---------------------
<S> <C> <C>
Leo Jaffe....................................... 2,000 0
James L. Johnson................................ 0 721,885(3)(4)
Robert E. LaBlanc............................... 4,000 0
Charles R. Lee.................................. 0 634,045(3)(4)
Michael T. Masin................................ 0 75,199(3)(5)
Russell E. Palmer............................... 0 1,800(6)
Terry S. Parker................................. 0 188,359(3)(4)(7)
Irwin Schneiderman.............................. 0 0
Nicholas L. Trivisonno.......................... 0 181,762(3)(4)
James W. Walter................................. 0 11,800(8)
Dennis L. Whipple............................... 18,650(9) 9,724(3)(4)
Charles Wohlstetter............................. 0 232,455
</TABLE>

<TABLE>
<CAPTION>
NUMBER OF SHARES OF
CLASS A COMMON STOCK NUMBER OF SHARES OF
BENEFICIALLY GTE COMMON STOCK
NAME OF EXECUTIVE OFFICER OWNED(1) BENEFICIALLY OWNED(2)
---------------------------------------------- -------------------- ---------------------
<S> <C> <C>
Dennis L. Whipple............................. 18,650(9) 9,724(3)(4)
Randall L. Crouse............................. 3,100(9) 5,505(4)
Pamela F. Lopez............................... 1,700(9) 2,585(4)
Laura E. Binion............................... 1,700(9) 1,905(3)(4)
Theodore J. Carrier........................... 15,000(9) 216(4)
All directors and officers as a group (the
"Executive Group").......................... 46,150(9) 2,114,809(3)(4)
</TABLE>

- ---------------
(1) Each of these amounts, and all of them in the aggregate, represented less
than 1% of the outstanding Class A Shares as of January 31, 1995. Each
director and executive officer is expected to accept the Merger
Consideration and not exercise appraisal rights.

(2) Each of these amounts, and all of them in the aggregate, represented less
than 1% of the outstanding shares of GTE Common Stock as of January 31,
1995.

(3) Included in the number of shares beneficially owned by Messrs. Johnson, Lee,
Masin, Parker, Trivisonno and Whipple and Ms. Binion and the Executive Group
are: 633,300; 571,999; 72,599; 169,099; 170,233; 5,300; 816; and 1,648,978
shares, respectively, which such persons have the right to acquire within 60
days pursuant to stock options.

(4) This amount includes shares acquired through participation in GTE's
Consolidated Employee Stock Ownership Plan and/or Savings Plan.

(5) In addition to the shares of GTE Common Stock shown above, Mr. Masin owns
10,088, GTE Common Stock Units, which are payable in cash under the Deferred
Compensation Plan and Phantom Stock Plan for Nonemployee Members of the
Board of Directors of GTE Corporation (the "Deferred Compensation Plan").
Mr. Masin was a non-employee director of GTE prior to joining GTE as Vice
Chairman in 1993.

(6) In addition to the shares of GTE Common Stock shown above, Mr. Palmer owns
994 GTE Common Stock Units, which are payable in cash under the Deferred
Compensation Plan.

(7) This amount includes 68 shares of GTE Common Stock held by a member of Mr.
Parker's family.

48
<PAGE> 50

(8) In addition to the shares of GTE Common Stock shown above, Mr. Walter owns
120,816 GTE Common Stock Units, which are payable in cash under the Deferred
Compensation Plan.

(9) Included in the number of shares beneficially owned by Messrs. Whipple,
Crouse and Carrier and Ms. Lopez and Ms. Binion and the Executive Group are
18,650, 3,100, 15,000, 1,700, 1,700 and 40,150 shares, respectively, which
such persons have the right to acquire upon the exercise of certain stock
options. Pursuant to an offer made by the Company in connection with the
Merger, such options, whether or not currently vested, may be surrendered
for a cash payment equal to $25.50 times the number of shares issuable upon
exercise thereof, less the exercise price applicable thereto. See "RELATED
PARTY TRANSACTIONS -- Payments to Optionholders".

DIRECTORS AND EXECUTIVE OFFICERS OF GTE, CONTEL AND CCI ACQUISITION

As set forth in Exhibit E, certain directors and executive officers of the
Company are also directors or executive officers of GTE, Contel or CCI
Acquisition. With the exception of the ownership of Class A Shares by certain of
such persons set forth in "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT -- Directors and Executive Officers of the Company", no director or
executive officer of GTE, Contel or CCI Acquisition owns any Class A Shares.

49
<PAGE> 51

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents which have been filed by the Company with the
Securities and Exchange Commission, as noted below, are incorporated by
reference into this Information Statement: (a) Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 (as amended by Form 10-K/A filed January
25, 1995); (b) Quarterly Report on Form 10-Q for the fiscal quarters ended March
31, 1994, June 30, 1994 and September 30, 1994; and (c) Proxy Statement dated
April 29, 1994. The File Number for all of the above referenced documents is
Commission File No. 0-16714. All documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, and prior to the date the written consent is used to effect the Merger,
shall be deemed to be incorporated by reference into this Information Statement.

Any statement contained herein or in any document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for the purposes of this Information Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed to
constitute a part of this Information Statement, except as so modified or
superseded.

The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Information Statement is delivered,
upon written or oral request of such person and by first class mail or other
equally prompt means within one business day of receipt of such request, a copy
of any and all of the information that has been incorporated by reference in
this Information Statement (not including exhibits to such information unless
such exhibits are specifically incorporated by reference into such information).
Such requests for information should be directed to Contel Cellular Inc., 245
Perimeter Parkway, Atlanta, Georgia 30346, Attention: General Counsel. The
telephone number of the General Counsel is (404) 804-3400.

By Order of the Board of Directors

/s/ JAY M. ROSEN

Secretary

Atlanta, Georgia
February , 1995

50
<PAGE> 52

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
- ---------------- ------------------------------------------------------------------ ------------
<S> <C> <C>
EXHIBIT A -- AGREEMENT AND PLAN OF MERGER, AS AMENDED.......................... A-1
EXHIBIT B -- OPINION OF LAZARD FRERES & CO..................................... B-1
EXHIBIT C-1 -- OPINION OF MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED..... C-1-1
EXHIBIT C-2 -- OPINION OF PAINEWEBBER INCORPORATED............................... C-2-1
EXHIBIT D -- DELAWARE GENERAL CORPORATION LAW SECTION 262...................... D-1
EXHIBIT E -- DIRECTORS AND EXECUTIVE OFFICERS OF GTE
CORPORATION, CONTEL CORPORATION, CONTEL CELLULAR
ACQUISITION CORPORATION AND CONTEL
CELLULAR INC...................................................... E-1
EXHIBIT F -- REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS.......................... F-1
</TABLE>
<PAGE> 53

EXHIBIT A

AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER dated as of December 27, 1994 (the
"Agreement") among GTE Corporation, a New York corporation ("GTE"), Contel
Corporation, a Delaware corporation and a wholly-owned subsidiary of GTE
("Contel"), Contel Cellular Acquisition Corporation, a Delaware corporation
("Purchaser") and a wholly-owned subsidiary of Contel, and Contel Cellular Inc.,
a Delaware corporation (the "Company").

R E C I T A L S

WHEREAS, Contel has adopted a plan of liquidation;

WHEREAS, GTE, through its wholly-owned subsidiary, Contel, is presently the
beneficial owner of all of the outstanding shares of Class B Common Stock of the
Company (as defined below);

WHEREAS, Contel desires to acquire beneficial ownership of the remaining
equity interest in the Company (the "Acquisition"), and has caused Purchaser to
be formed to accomplish such purpose;

WHEREAS, Contel and Purchaser intend to accomplish the Acquisition through
a merger of Purchaser with and into the Company (the "Merger"), upon the terms
and subject to the conditions set forth herein; and

WHEREAS, the respective Boards of Directors of Purchaser and the Company
and the Special Committee appointed by the Board of Directors of the Company to
consider the Acquisition have approved the Merger upon the terms and subject to
the conditions set forth herein.

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

DEFINED TERMS

The following terms used in this Agreement shall have the following
meanings:

"Acquisition" has the meaning set forth in the recitals hereto.

"Actions" has the meaning set forth in Section 6.2 hereof.

"Certificates" has the meaning set forth in Section 3.2(b) hereof.

"Class A Common Stock" means the Class A Common Stock of the Company, par
value $1.00 per share.

"Class B Common Stock" means the Class B Common Stock of the Company, par
value $1.00 per share.

"Commission" means the Securities and Exchange Commission and/or any other
governmental entity which administers either the Securities Act or the Exchange
Act.

"Common Stock" means the Class A Common Stock and Class B Common Stock.

"Company" has the meaning set forth in the preamble hereto.

"Constituent Corporations" has the meaning set forth in Section 2.1 hereof.

"Contel" has the meaning set forth in the preamble hereto.

"Depositary" has the meaning set forth in Section 3.2 hereof.

"DGCL" means the Delaware General Corporation Law.

"Dissenting Shares" has the meaning set forth in Section 3.1 hereof.

"Effective Time" has the meaning set forth in Section 2.2 hereof.

A-1
<PAGE> 54

"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.

"GTE" has the meaning set forth in the preamble hereto.

"Indemnified Parties" has the meaning set forth in Section 6.2 hereof.

"Indemnitor" has the meaning set forth in Section 6.2 hereof.

"Information Statement" means the information statement on Form 14C
relating to the Merger, as amended or supplemented, to be prepared and
circulated as contemplated by Section 6.3 hereof.

"Merger" has the meaning set forth in the recitals hereto.

"Merger Consideration" has the meaning set forth in Section 2.4 hereof.

"Permitted Investments" has the meaning set forth in Section 3.2 hereof.

"Purchaser" has the meaning set forth in the preamble hereto.

"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

"Stockholder Materials" has the meaning set forth in Section 6.3 hereof.

"Surviving Corporation" has the meaning set forth in Section 2.1 hereof.

"Transaction Statement" means the transaction statement on Form 13e-3
relating to the Merger, as amended or supplemented, to be prepared and
circulated as provided in Section 6.3 hereof.

ARTICLE II

THE MERGER

SECTION 2.1 The Merger. Upon the terms and subject to the conditions
hereof, and in accordance with the applicable provisions of the DGCL, Purchaser
shall be merged with and into the Company. The Company shall continue as the
surviving corporation (the "Surviving Corporation") in the Merger and the
separate corporate existence of Purchaser shall cease (Purchaser and the Company
are sometimes referred to herein as the "Constituent Corporations"). From and
after the Effective Time, the Surviving Corporation shall possess all of the
rights, privileges, immunities and franchises, and shall be responsible and
liable for all of the liabilities and obligations, of each of the Constituent
Corporations, all as set forth in Section 259 of the DGCL.

SECTION 2.2 Effective Time. The Merger shall be consummated by filing with
the Secretary of State of Delaware a Certificate of Merger executed in
accordance with the relevant provisions of the DGCL. The Merger shall become
effective at the time of filing with the Secretary of State of Delaware of a
Certificate of Merger. The date and time when the Merger shall become effective
is herein referred to as the "Effective Time."

SECTION 2.3 Closing. Upon the terms and subject to the conditions hereof,
as soon as practicable after the execution of the written consents of
shareholders contemplated by Sections 6.3(b) and (c) hereof, the Company and
Purchaser shall file the Certificate of Merger in accordance with Section 2.2
hereof, and the Company and Purchaser shall take all such other and further
actions as may be required by law to make the Merger effective.

SECTION 2.4 Conversion of Shares of Common Stock. (a) Each share of Class
A Common Stock issued and outstanding immediately prior to the Effective Time
(other than Dissenting Shares, if any, and shares of Class A Common Stock held
by the Company, Purchaser, Contel or GTE) shall, by virtue of the Merger and
without any action on the part of the holder thereof, be cancelled and shall
cease to exist and shall be converted into the right to receive cash in the
amount of $25.50 in accordance with Section 3.2 hereof. The

A-2
<PAGE> 55

consideration to be paid in respect of each share of Class A Common Stock in
accordance with the foregoing is hereinafter referred to as the "Merger
Consideration."

(b) Each share of Class A Common Stock held by the Company, Purchaser,
Contel or GTE immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, be cancelled
and cease to exist, without any conversion thereof and without any Merger
Consideration being paid with respect thereto.

(c) Each share of Class B Common Stock issued and outstanding immediately
prior to the Effective Time shall by virtue of the Merger, and without any
action on the part of the holder thereof, be converted into one newly issued
share of the Class B Common Stock of the Surviving Corporation.

SECTION 2.5 Cancellation of Purchaser Capital Stock. Each share of common
stock of Purchaser issued and outstanding immediately prior to the Effective
Time shall, by virtue of the Merger, and without any action on the part of the
holder thereof, be cancelled and cease to exist, without any conversion thereof
and without any Merger Consideration being paid with respect thereto.

SECTION 2.6 Certificate of Incorporation. The Certificate of Incorporation
of the Company, as in effect immediately prior to the Effective Time, shall be
the Certificate of Incorporation of the Surviving Corporation, until thereafter
amended.

SECTION 2.7 By-Laws. The By-Laws of the Company, as in effect immediately
prior to the Effective Time, shall be the By-Laws of the Surviving Corporation,
until thereafter amended.

SECTION 2.8 Directors. The directors of the Company at the Effective Time
shall be the directors of the Surviving Corporation and shall hold office from
the Effective Time until their respective successors are duly elected or
appointed and qualified in the manner provided in the Certificate of
Incorporation and By-Laws of the Surviving Corporation, or as otherwise provided
by law.

SECTION 2.9 Officers. The officers of the Company at the Effective Time
shall be the initial officers of the Surviving Corporation, all such officers to
hold office from the Effective Time until their respective successors are duly
elected or appointed and qualified in the manner provided in the Certificate of
Incorporation and By-Laws of the Surviving Corporation, or as otherwise provided
by law.

SECTION 2.10 Further Assistance. If at any time after the Effective Time,
the Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments or assurances or any other acts or thing are necessary,
desirable or proper (i) to vest, perfect or confirm, of record or otherwise, in
the Surviving Corporation, its right, title or interest in, to or under any of
the rights, properties or assets of the Constituent Corporations acquired or to
be acquired as a result of the Merger, or (ii) otherwise to carry out the
purposes of this Agreement, the Surviving Corporation and its proper officers
and directors or their designees shall be authorized to execute and deliver, in
the name and on behalf of the Constituent Corporations, all such deeds, bills of
sale, assignments and assurances and do, in the name and on behalf of the
Constituent Corporations, all such other acts and things necessary, desirable or
proper to vest, perfect or confirm its right, title or interest in, to or under
any of the rights, properties or assets of the Constituent Corporations acquired
or to be acquired as a result of the Merger and otherwise to carry out the
purposes of this Agreement.

ARTICLE III

DISSENTING SHARES; EXCHANGE AND PAYMENT FOR SHARES

SECTION 3.1 Dissenting Shares. Notwithstanding anything in this Agreement
to the contrary, shares of Class A Common Stock that are issued and outstanding
immediately prior to the Effective Time and that are held by a stockholder who
has the right (to the extent such right is available by law) to demand and
receive payment of the fair value of such holder's stock pursuant to Section 262
of the DGCL (the "Dissenting Shares") shall not be converted into the right to
receive the Merger Consideration provided for in Section 2.4(a) of this
Agreement (unless and until such holder shall have failed to perfect or shall
have effectively withdrawn or lost such right under the DGCL, as the case may
be), but the holder thereof shall

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only be entitled to such rights as are granted by Delaware law. If such holder
shall have so failed to perfect or shall have effectively withdrawn or lost such
right, such holder's shares of Class A Common Stock shall thereupon be deemed to
have been converted at the Effective Time into the right to receive the Merger
Consideration without any interest thereon. If the holder of any shares of Class
A Common Stock shall become entitled to receive payment for such shares pursuant
to Section 262 of the DGCL, such payment shall be made by the Surviving
Corporation.

SECTION 3.2 Payment for Shares. Prior to the Effective Time, Purchaser
shall or, in the event Purchaser shall fail to do so, GTE shall:

(a) designate a bank or trust company to act as Depositary in the Merger
(the "Depositary") and Purchaser or GTE shall enter into a mutually acceptable
agreement with the Depositary pursuant to which, after the Effective Time, the
Depositary will distribute the Merger Consideration on a timely basis and (b)
according to the terms of the agreement with Depositary, deposit or cause to be
deposited with the Depositary cash in the aggregate amount required with respect
to the conversion of shares of Class A Common Stock at the Effective Time
pursuant to Section 2.4(a) hereof. Pending distribution of the cash deposited
with the Depositary, Purchaser may from time to time direct the Depositary to
invest such cash, provided that such investments (i) shall be (A) obligations of
(or guaranteed by) the United States of America or its agencies or
instrumentalities, (B) commercial paper obligations receiving the highest rating
from either Moody's Investors Services, Inc. or Standard & Poor's Corporation,
(C) certificates of deposit, bank repurchase agreements or bankers acceptances
on interest bearing accounts of commercial banks with capital exceeding $250
million (collectively, "Permitted Investments") or (D) money market funds that
are required by their most current prospectus to have at least 80% of their
assets invested in Permitted Investments and (ii) shall have maturities that
will not prevent or delay payments to be made pursuant to this section.

(b) As soon as practicable after the Effective Time, the Depositary shall
be instructed to mail to each record holder (other than any holder of Dissenting
Shares, the Company, Purchaser, Contel and GTE) of a certificate or certificates
that immediately prior to the Effective Time represented shares of Class A
Common Stock (the "Certificates") a form of letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss shall pass, only upon
proper delivery of the Certificates to the Depositary) and instructions for use
in effecting the surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender to the Depositary of a Certificate, together with
such letter of transmittal duly executed and completed in accordance with the
instructions thereon, the holder of such Certificate shall be entitled to
receive in exchange therefor consideration equal to the number of shares of
Class A Common Stock represented by such Certificate multiplied by the Merger
Consideration and such Certificate shall forthwith be cancelled. No interest
will be paid or accrued on the Merger Consideration. All distributions to
holders of Certificates shall be subject to any applicable income tax
withholding. If the Merger Consideration is to be distributed to a person other
than the person in whose name the Certificate surrendered is registered, it
shall be a condition of such distribution that the Certificate so surrendered
shall be properly endorsed or otherwise in proper form for transfer (including
signature guarantees if required by Purchaser) and that the person requesting
such distribution shall pay any transfer or other taxes required by reason of
such distribution to a person other than the registered holder of the
Certificate surrendered or, in the alternative, establish to the satisfaction of
the Surviving Corporation that such tax has been paid or is not applicable.
After one hundred and eighty (180) days following the Effective Time, the
Surviving Corporation shall be entitled to require the Depositary to deliver to
it any cash (including any interest received with respect thereto) that it has
made available to the Depositary and that has not been disbursed to holders of
Certificates, and thereafter such holders shall be entitled to look to the
Surviving Corporation only as general creditors thereof with respect to the cash
payable upon due surrender of their Certificates. The Surviving Corporation
shall pay all charges and expenses, including those of the Depositary, in
connection with the distribution of the Merger Consideration for shares of Class
A Common Stock. Until surrendered in accordance with the provisions of this
Section 3.2, each Certificate (other than Certificates representing Dissenting
Shares or shares of Class A Stock held by the Company, Purchaser, Contel or GTE)
shall represent for all purposes the right to receive consideration equal to the
Merger Consideration multiplied by the number of shares of Class A Common Stock
evidenced by such

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Certificate. From and after the Effective Time, holders of Certificates
immediately prior to the Merger shall have no right to vote or to receive any
dividends or other distributions with respect to any shares of Class A Common
Stock that were theretofore represented by such Certificates, other than any
dividends or other distributions payable to holders of record as of a date prior
to the Effective Time, and shall have no other rights in respect thereof other
than as provided herein or by law.

(c) From and after the Effective Time, there shall be no transfers on the
stock transfer books of the Surviving Corporation of the shares of Class A
Common Stock that were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation, other than Certificates in respect of Dissenting Shares, the rights
to which have been perfected or not withdrawn or lost under the DGCL, they shall
be cancelled and exchanged for Merger Consideration as provided in this Article
III.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Purchaser, Contel and GTE as
follows:

SECTION 4.1 Organization and Qualification. The Company is a corporation
duly organized, validly existing and in good standing under the laws of Delaware
and has the requisite corporate power to carry on its business as now conducted.

SECTION 4.2 Authority Relative to this Agreement. The Company has the
requisite corporate power and authority to enter into this Agreement and to
perform its obligations hereunder. The execution and delivery of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly authorized by the Board of Directors of the
Company, and no other corporate proceeding on the part of the Company is
necessary to authorize the execution, delivery and performance of this Agreement
and the transactions contemplated hereby (other than the approval of
stockholders of the Company required to consummate the Merger). This Agreement
has been duly executed and delivered by the Company and constitutes its valid
and binding obligation, enforceable against it in accordance with its terms,
except to the extent that enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or other laws affecting the enforcement
of creditors' rights generally or by general equitable principles.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF CONTEL, GTE AND PURCHASER

SECTION 5.1 Representations and Warranties of Purchaser

Purchaser represents and warrants to the Company as follows:

(a) Organization and Qualification. It is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has the requisite corporate power to carry
on its business as now conducted.

(b) Authority Relative to this Agreement. It has the requisite
corporate power and authority to enter into this Agreement and to perform
its obligations hereunder. The execution and delivery of this Agreement by
it and the consummation by it of the transactions contemplated hereby have
been duly authorized by its Board of Directors, and no other corporate
proceeding on its part is necessary to authorize the execution, delivery
and performance of this Agreement and the transactions contemplated hereby
(other than the approval of its stockholders required to consummate the
Merger). This Agreement has been duly executed and delivered by it and
constitutes its valid and binding obligation, enforceable against it in
accordance with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights generally or by general
equitable principles.

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(c) No Prior Activities. It has not incurred, nor will it incur,
directly or through any subsidiary, any liabilities or obligations, except
those incurred in connection with its organization or with the negotiation
of this Agreement and the consummation of the transactions contemplated
hereby, including the Merger. Except as set forth in the previous sentence,
it has not engaged, directly or through any subsidiary, in any business
activities of any type or kind whatsoever, or entered into any agreements
or arrangements with any person or entity.

SECTION 5.2 Representations and Warranties of GTE and Contel.

Contel and GTE each represents and warrants to the Company as follows:

(b) Authority Relative to this Agreement. It has the requisite
corporate power and authority to enter into this Agreement and to perform
its obligations hereunder. The execution and delivery of this Agreement by
it and the consummation by it of the transactions contemplated hereby have
been duly authorized by its Board of Directors, and no other corporate
proceeding on its part is necessary to authorize the execution, delivery
and performance of this Agreement and the transactions contemplated hereby.
This Agreement has been duly executed and delivered by it and constitutes
its valid and binding obligation, enforceable against it in accordance with
its terms, except to the extent that enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other laws affecting
the enforcement of creditors' rights generally or by general equitable
principles.

ARTICLE VI

COVENANTS

SECTION 6.1 Conduct of Business of the Company. Except as otherwise
expressly provided in this Agreement, from the date of this Agreement to the
Effective Time, the Company will conduct its business in the ordinary course.

SECTION 6.2 Indemnification, Etc. The Company shall indemnify and hold
harmless, and, after the Effective Time, the Surviving Corporation and GTE (the
Company, the Surviving Corporation and GTE, for the purpose of this Section 6.2
being the "Indemnitor") will indemnify and hold harmless, each present and
former director and officer of the Company (the "Indemnified Parties") against
any losses, claims, damages, liabilities, costs, expenses, judgments and amounts
paid in settlement in connection with any claim, action, suit, proceeding or
investigation (collectively, "Actions") arising out of or pertaining to any
action or omission occurring prior to the Effective Time (including without
limitation, any Actions which arise out of or relate to the transactions
contemplated by this Agreement) to the full extent permitted under the DGCL (and
the Indemnitor will advance reasonable expenses to each such person to the full
extent so permitted); provided, however, that any determination required to be
made with respect to whether an Indemnified Party's conduct complied with the
standards set forth in the DGCL shall be made in accordance with the DGCL, and
the Indemnitor shall pay the reasonable fees and expenses incurred in connection
with such determination. If any such Action is brought against any Indemnified
Party (whether arising before or after the Effective Time), (a) the Indemnified
Parties may retain counsel reasonably satisfactory to them and the Indemnitor,
(b) the Indemnitor shall pay all reasonable fees and expenses of such counsel
for the Indemnified Parties promptly as statements therefor are received, and
(c) the Indemnitor and the Indemnified Parties will cooperate in the vigorous
defense of any such matter, provided, that the Indemnitor shall not be liable
for any such settlement effected without its written consent, which consent,
however, shall not be unreasonably withheld. Any Indemnified Party wishing to
claim indemnification under this Section 6.2, upon learning of any such Action
shall notify the Indemnitor thereof and shall deliver to the Indemnitor an
undertaking to repay any amounts advanced pursuant hereto when and if a court of
competent jurisdiction shall ultimately determine, after exhaustion of all
avenues of appeal, that such Indemnified Party was not entitled to
indemnification under this Section. The Indemnified Parties as a group may
retain only one law firm in each jurisdiction to represent

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them with respect to any such matter unless there is, under applicable standards
of professional conduct, a conflict on any significant issue between the
positions of any two or more Indemnified Parties. GTE and Purchaser agree to
cause to be maintained in effect the present policy of directors' and officers'
liability insurance (or an equivalent policy) covering those persons who are
currently covered by such policy for three years from the Effective Time. This
Section 6.2 shall survive consummation of the Merger.

SECTION 6.3 Stockholders' Approval; SEC Filings.

(a) Subject to the terms and conditions contained herein, this
Agreement and the transactions contemplated hereby shall be submitted by
the Company and Purchaser to their respective stockholders for approval.
Promptly after the execution of this Agreement, the Company and Purchaser
shall together, or pursuant to an allocation of responsibility to be agreed
upon between them, (i) use their best efforts to obtain all information
required to be included in the Information Statement, the Transaction
Statement and related materials (the "Stockholder Materials"), (ii) prepare
and file with the Commission the Stockholder Materials, (iii) use all
reasonable efforts to have the Stockholder Materials cleared by the
Commission as promptly as practicable, and (iv) promptly following
clearance by the Commission, mail the Stockholders Materials to
shareholders of the Company. Purchaser and the Company also shall take any
action required to be taken under state blue sky or securities laws or the
rules and regulations of any securities exchanges or markets on which their
securities are listed for trading in connection with transactions
contemplated hereby including the Merger. The Information Statement and the
Transaction Statement shall, when first mailed to the stockholders of the
Company and as amended or supplemented thereafter, comply as to form in all
material respects with all applicable requirements of federal securities
laws. Purchaser and the Company shall each furnish to the other and their
counsel all such information as may be required to prepare the Stockholders
Materials. All such information provided and to be provided by Purchaser
and the Company respectively, for use in the Stockholder Materials shall,
on the date the Information Statement or Transaction Statement is first
mailed to the Company's stockholders and as amended or supplemented
thereafter, be true and correct in all material respects and shall not omit
to state any material fact necessary in order to make such information in
light of the circumstances in which it was given not misleading, and the
Company and the Purchaser each agree to correct any information provided by
it for use in the Information Statement or Transaction Statement which
shall have become false or misleading in any material respect.

(b) Subject to the terms and conditions set forth in the next
sentence, GTE, the Company and Contel agree that Contel shall execute a
written consent as majority shareholder of the Company approving this
Agreement and the Merger. Such consent shall be executed by Contel only
after the passage of any waiting periods, following the mailing of the
Stockholders' Materials to the stockholders of the Company, required for
compliance with the Securities Act, the Exchange Act, the DGCL and any
other laws, rules or regulations applicable to Company.

(c) Contel shall also execute a written consent as majority
shareholder of Purchaser approving this Agreement and the Merger. Such
consent shall be executed concurrently with the execution of the consent
referred to in paragraph (b).

Section 6.4 Consents. Subject to the terms and conditions herein provided,
each of the parties hereto agrees to use its commercially reasonable efforts to
take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this Agreement, and to
cooperate with each other in connection with the foregoing, including using
commercially reasonable efforts to (i) obtain all necessary waivers, consents
and approvals from other parties to loan agreements, leases and other contracts,
(ii) obtain all necessary consents, approvals and authorizations as are required
to be obtained under any federal, state or foreign law or regulations, (iii)
defend all lawsuits or other legal proceedings challenging this Agreement or the
consummation of the transactions contemplated hereby, (iv) lift or rescind any
injunction or restraining order or other order adversely affecting the ability
of the parties to consummate the transactions contemplated hereby, and (v)
effect all registrations and filings necessary to consummate the transactions
contemplated hereby.

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ARTICLE VII

CONDITIONS TO CONSUMMATION OF THE MERGER

The respective obligations of each party to effect the Merger are subject
to the satisfaction at or prior to the Effective Time of the following
conditions:

(a) This Agreement and the transactions contemplated hereby shall have
been approved by any necessary vote of the stockholders of the Company and
Purchaser in accordance with applicable law and Sections 6.3(b) and (c);

(b) No statute, rule, regulation, executive order, decree or
injunction (preliminary or permanent) shall have been enacted, entered,
promulgated or enforced by any federal or state court of competent
jurisdiction in the United States or other governmental authority which
prohibits the consummation of the Merger and remains in effect after GTE,
the Company and Purchaser shall have used all commercially reasonable
efforts to lift any injunction;

(c) No consents of or filings with any governmental entity shall be
required for consummation of the Merger which have not been obtained or
filed; and

(d) The Special Committee of the Board of Directors of the Company
shall not have modified or rescinded its recommendation with respect to the
Merger.

ARTICLE VIII

TERMINATION; AMENDMENT; WAIVER

SECTION 8.1 Termination. This Agreement may be terminated and the Merger
contemplated hereby may be abandoned at any time notwithstanding approval
thereof by the stockholders of the Company, but prior to the Effective Time:

(a) by mutual written consent of each of Purchaser and the Company; or

(b) by Purchaser or the Company if any court of competent jurisdiction
in the United States or other United States governmental body shall have
issued an order, decree or ruling or taken any other action restraining,
enjoining or otherwise prohibiting the Merger and such order, decree,
ruling or other action shall have become final and non-appealable; or

(c) by Purchaser or the Company if the Merger does not occur within
120 days of the date of this Agreement unless the Merger shall not have
occurred primarily as the result of a delay occasioned by review of filings
by regulatory agencies.

SECTION 8.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 8.1, this Agreement shall
forthwith become void and have no effect, without liability on the part of any
party or its directors, officers, stockholders or partners.

SECTION 8.3 Amendment. This Agreement may be amended by action taken by
Purchaser and the Company at any time, provided that following approval of this
agreement by the shareholders of Company or Purchaser any amendment of this
Agreement shall be subject to compliance with Section 251(d) of the DGCL. The
prior approval of a majority of the members of the Special Committee shall be
required in connection with any amendment or modification by or on behalf of the
Company. This Agreement may not be amended, modified or supplemented except by
an instrument in writing signed on behalf of the party against whom enforcement
is sought.

SECTION 8.4 Extension; Waiver. At any time prior to the Effective Time,
the parties may (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document, certificate or writing delivered pursuant hereto or (iii) waive
compliance with any of the agreements or conditions contained herein, except as
otherwise provided by law and except that the provisions of Section 6.2 hereof
shall not be waived.

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<PAGE> 61

Any agreement on the part of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing on behalf of such party,
and, in the case of an extension or waiver by the Company, if such extension or
waiver has been approved by a majority of the members of the Special Committee.

ARTICLE IX

MISCELLANEOUS

SECTION 9.1 Survival of Representations, Warranties and Agreements. The
representations, warranties and agreements made herein shall not survive beyond
the Effective Time, except for the agreements set forth in Sections 2.10, 3.1,
3.2 and 6.2.

SECTION 9.2 Entire Agreement; Assignment. This Agreement (a) constitutes
the entire agreement between the parties with respect to the subject matter
hereof and supersedes all other prior agreements and understandings, both
written and oral, between the parties or any of them with respect to the subject
matter hereof, and (b) shall not be assigned by operation of law or otherwise;
provided that Purchaser may assign its rights and obligations to any wholly
owned, direct or indirect subsidiary, but no such assignment shall relieve
Purchaser of its obligations hereunder if such assignor does not perform such
obligations.

SECTION 9.3 Validity. The validity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.

SECTION 9.4 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by cable, telegram or telex, or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses or at such other addresses as
shall be specified by the parties by like notice.

(i) if to the Purchaser, to:

Marianne Drost, Secretary
CCI Acquisition Corporation
One Stamford Forum
Stamford, CT 06904

with a copy to:

Jeffrey Rosen
O'Melveny & Myers
555 Thirteenth Street, N.W.
Suite 500 West
Washington, DC 20004

(ii) if to the Company, to:

Marianne Drost
Contel Cellular Inc.
c/o GTE Corporation
One Stamford Forum
Stamford, CT 06904

with a copy to:

W. Leslie Duffy
Cahill Gordon & Reindel
80 Pine Street
New York, NY 10005

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(iii) if to Contel, to:
Marianne Drost, Secretary
Contel Corporation
One Stamford Forum
Stamford, CT 06904

(iv) if to GTE, to:
Marianne Drost, Secretary
GTE Corporation
One Stamford Forum
Stamford, CT 06904

SECTION 9.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of Delaware, regardless of the
laws that might otherwise govern under applicable principles of conflict of laws
thereof.

SECTION 9.6 Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.

SECTION 9.7 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of the parties hereto, and nothing in this
Agreement, express or implied, is intended to confer upon any other person any
rights, benefits or remedies of any nature whatsoever under or by reason of this
Agreement, except as expressly provided in Section 6.2 (which is intended to be
for the benefit of the persons referred to therein and may be enforced by such
persons).

SECTION 9.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.

SECTION 9.9 Expenses. All costs and expenses incurred in connection with
the transactions contemplated by this Agreement shall be paid by the party
incurring such expenses.

SECTION 9.10 Specific Performance. The parties hereto agree that if for
any reason any party hereto shall have failed to perform its obligations under
this Agreement, then any other party hereto seeking to enforce this Agreement
against such non-performing party shall be entitled to specific performance and
injunctive and other equitable relief, and the parties hereto further agree to
waive any requirement for the securing or posting of any bond in connection with
the obtaining of any such injunctive or other equitable relief. This provision
is without prejudice to any other rights that any party hereto may have against
any other party hereto for any failure to perform its obligations under this
Agreement.

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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
day and year first above written.

CONTEL CELLULAR INC.

By: /s/ DENNIS WHIPPLE

--------------------------------------
Title: President

CONTEL CELLULAR ACQUISITION
CORPORATION

By: /s/ MARIANNE DROST

--------------------------------------
Title: Secretary

CONTEL CORPORATION

By: /s/ MARIANNE DROST

--------------------------------------
Title: Secretary

GTE CORPORATION

By: /s/ JAMES MURPHY

--------------------------------------
Title: Vice President and Treasurer

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<PAGE> 64

FIRST AMENDMENT TO THE AGREEMENT AND PLAN OF MERGER

First Amendment to the Agreement and Plan of Merger dated as of January 27,
1995 (the "First Amendment") among GTE Corporation, a New York corporation
("GTE"), Contel Corporation, a Delaware corporation and a wholly-owned
subsidiary of GTE ("Contel"), Contel Cellular Acquisition Corporation, a
Delaware corporation ("Purchaser") and a wholly-owned subsidiary of Contel, and
Contel Cellular Inc., a Delaware corporation (the "Company").

RECITALS

WHEREAS, GTE, Contel, Purchaser and the Company have entered into an
Agreement and Plan of Merger dated as of December 27, 1994 (the "Agreement");

WHEREAS, GTE, Contel, Purchaser and the Company desire to amend the
Agreement as set forth herein.

NOW, THEREFORE, the parties hereto agree as follows:

Section 1. Definitions. All capitalized terms used herein shall have
the meaning ascribed to them in the Agreement.

Section 2. Amendment of Section 2.3. Section 2.3 of the Agreement is
hereby amended in its entirety to read as follows:

Upon the terms and subject to the conditions hereof, as soon as
practicable after the execution of the written consents of shareholders
contemplated by Sections 6.3(b) and (c) hereof and after the passage of
waiting periods required for compliance with the Securities Act, the
Exchange Act, the DGCL and any other rules or regulations applicable to
the Company, the Company and Purchaser shall file the Certificate of
Merger in accordance with Section 2.2 hereof, and the Company and
Purchaser shall take all such other and further actions as may be
required by law to make the Merger effective.

Section 3. Amendment of Section 6.3(b). Section 6.3(b) of the
Agreement is hereby amended in its entirety to read as follows:

(b) GTE, the Company and Contel agree that Contel shall execute a
written consent as majority shareholder of the Company approving this
Agreement and the Merger as soon as practicable after the execution of
this Agreement.

The Agreement, as amended hereby, shall remain in full force and effect and
shall constitute the agreement of the parties.

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<PAGE> 65

IN WITNESS WHEREOF, each of the parties has caused this First Amendment to
be executed on its behalf by its officers thereunto duly authorized, all as of
the day and year first above written.

CONTEL CELLULAR INC.

By: /s/ DENNIS WHIPPLE

--------------------------------------
Title: President

CONTEL CELLULAR ACQUISITION
CORPORATION

By: /s/ MARIANNE DROST

--------------------------------------
Title: Secretary

CONTEL CORPORATION

By: /s/ MARIANNE DROST

--------------------------------------
Title: Secretary

GTE CORPORATION

By: /s/ JAMES MURPHY

--------------------------------------
Title: Vice President and
Treasurer

By: /s/ MARIANNE DROST

--------------------------------------
Title: Secretary

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EXHIBIT B

OPINION OF LAZARD FRERES & CO.

[LAZARD FRERES & CO. LETTERHEAD]

December 30, 1994
Special Committee of the
Board of Directors
Contel Cellular Inc.
c/o Contel Corporation
375 Park Avenue, 24th Floor
New York, NY 10152

Dear Members of the Special Committee:

You have requested our opinion as to the fairness, from a financial point
of view, to the holders of the Class A Common Stock, par value $1.00 per share
(the "Common Stock") of Contel Cellular Inc. ("CCI"), other than GTE Corporation
("GTE"), Contel Corporation ("Contel") and their affiliates, of the
consideration to be received by such holders in the proposed merger (the
"Merger") of CCI and a subsidiary of Contel.

We understand that the Merger is to be effected pursuant to an Agreement
and Plan of Merger, to be entered into among GTE, Contel, a subsidiary of
Contel, and CCI, a draft of which, dated December 29, 1994, has been furnished
to us (the "Merger Agreement"). The terms of the Merger Agreement provide, among
other things, that each share of Common Stock (other than any shares of Common
Stock held by stockholders who properly exercise and perfect stockholder
appraisal rights, if any, under the General Corporation Law of the State of
Delaware, and any shares held by CCI, GTE, Contel or such subsidiary of Contel
all of which shall be canceled), will be converted into the right to receive
cash in the amount of $25.50. We understand that GTE beneficially owns all of
the issued and outstanding shares of Class B Common Stock, par value $1.00 per
share, of CCI, which represents approximately ninety percent (90%) of the issued
and outstanding equity of CCI.

In connection with this opinion, we have, among other things:

(i) reviewed the terms and conditions of the Merger Agreement;

(ii) analyzed certain historical business and financial information
relating to CCI, including the Annual Reports to Stockholders
and Annual Reports on Form 10-K of CCI for each of the fiscal
years ended December 31, 1991 through 1993, and Quarterly
Reports on Form 10-Q of CCI for the quarters ended March 31,
June 30, and September 30, 1994;

(iii) reviewed certain financial forecasts and other data provided to
us by CCI relating to CCI;

(iv) held discussions with members of the senior managements of CCI
and GTE with respect to the businesses and prospects of CCI and
its strategic objectives;

(v) reviewed public information with respect to certain other
companies in lines of businesses we believe to be generally
comparable to the businesses of CCI;

(vi) reviewed the financial terms of certain recent business
combinations involving companies in lines of businesses we
believe to be generally comparable to CCI, and in other
industries generally;

(vii) reviewed the financial terms of certain recent business
combinations we believe to be comparable in certain respects to
the proposed Merger;

(viii) reviewed the historical stock prices and trading volumes of the
Common Stock; and

(ix) conducted such other financial studies, analyses and
investigations as we deemed appropriate.

B-1
<PAGE> 67

We understand that CCI and an affiliate of GTE propose to exchange certain
cellular assets owned by each of them for certain cellular assets owned by a
publicly-held company (the "Cellular Exchange"). We have received a copy of a
letter dated December 19, 1994 from GTE's Senior Vice President -- Finance
addressed to GTE's financial advisors, Merrill Lynch & Co. and PaineWebber
Incorporated, regarding the Cellular Exchange to the effect that it is an
exchange of equivalent assets and, accordingly, is value neutral to CCI. We have
neither received nor reviewed any other information regarding the Cellular
Exchange, including any financial projections or any other non-public financial
information prepared by GTE or CCI. With your consent, we have assumed that the
Cellular Exchange involves the exchange of assets with substantially equivalent
value and, accordingly, will have an immaterial effect, if any, on CCI.

For purposes of this opinion, with your concurrence, we have ascribed no
value to CCI's rights under either (i) that certain Third Restated Competition
Agreement dated March 14, 1991, among Contel, GTE and CCI, or (ii) that certain
Services Agreement dated May 1, 1991, as amended, by and between GTE Mobile
Communications Service Corporation and CCI.

We have not reviewed any proxy or information statement or similar document
that may be prepared for use in connection with the proposed Merger. In
addition, we were not asked by the Special Committee (the "Special Committee")
of the Board of Directors of CCI to solicit third party indications of interest
in acquiring all or any part of CCI, nor did we seek any such offers.

We have relied upon the accuracy and completeness of the foregoing
financial and other information and have not assumed any responsibility for any
independent verification of such information or any independent valuation or
appraisal of any of the assets of CCI. With respect to financial forecasts, we
have assumed that they have been reasonably prepared on bases reflecting the
best currently available estimates and judgments of management of CCI as to the
future financial performance of CCI. We assume no responsibility and express no
view as to such forecasts or the assumptions on which they are based.

Further, our opinion is necessarily based on economic, monetary, market and
other conditions as in effect on, and the information made available to us as
of, the date hereof.

In rendering our opinion, we have assumed that the actual Agreement and
Plan of Merger entered into among the parties thereto will be identical in all
material respects to the Merger Agreement, that the Merger will be consummated
on the terms described in the Merger Agreement, without any waiver of any
material terms or conditions by CCI and that obtaining the necessary regulatory
approvals for the Merger will not have an adverse effect on CCI.

Lazard Freres & Co. has acted as financial advisor to the Special Committee
in connection with the proposed Merger and will receive a fee for our services,
a substantial portion of which is payable upon rendering this opinion.

Our engagement and the opinion expressed herein is solely for the benefit
of the Special Committee and is not on behalf of, and is not intended to confer
rights or remedies upon, GTE, any stockholders of CCI or GTE, or any other
person. It is understood that this letter may not be disclosed or otherwise
referred to without our prior consent, except as may otherwise be required by
law or a court of competent jurisdiction.

Based on and subject to the foregoing, we are of the opinion that the
consideration to be received by the holders of the Common Stock (other than GTE,
Contel or any of their affiliates) is fair to such holders from a financial
point of view.

Very truly yours,

LAZARD FRERES & CO.

B-2
<PAGE> 68

EXHIBIT C-1

OPINION OF MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

[MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED LETTERHEAD]

December 27, 1994

Board of Directors
GTE Corporation
One Stamford Forum
Stamford, CT 06904

Attention: J. Michael Kelly

Gentlemen:

Contel Corporation, a Delaware corporation ("Contel") and a wholly-owned
subsidiary of GTE Corporation (the "Company"), CCI Acquisition Company, a
Delaware corporation (the "Purchaser") and a wholly-owned subsidiary of Contel,
and Contel Cellular Inc., a Delaware corporation (the "Subject Company"),
propose to enter into an Agreement and Plan of Merger (the "Agreement") pursuant
to which the Purchaser will be merged into the Subject Company in a transaction
(the "Merger") in which each share of the Subject Company's Class A Common
Stock, par value $1.00 per share (the "Shares"), will be converted into the
right to receive $25.50 in cash per Share.

You have asked us whether, in our opinion, the proposed cash consideration
to be paid for the Shares pursuant to the Merger is fair to the Company from a
financial point of view.

In arriving at the opinion set forth below, we have, among other things:

(1) Reviewed the Subject Company's Annual Reports, Forms 10-K and
related financial information for the five fiscal years ended December 31,
1993 and the Subject Company's Forms 10-Q and the related unaudited
financial information for the quarterly periods ending March 31, 1994, June
30, 1994 and September 30, 1994;

(2) Reviewed certain information, including financial forecasts,
relating to the business, earnings, cash flow, assets and prospects of the
Subject Company, furnished to us by the Subject Company;

(3) Conducted discussions with members of senior management of the
Subject Company concerning its businesses and prospects;

(4) Reviewed the historical market prices and trading activity for the
Shares and compared them with that of certain publicly traded companies
which we deemed to be reasonably similar to the Subject Company;

(5) Compared the results of operations of the Subject Company with
that of certain companies which we deemed to be reasonably similar to the
Subject Company;

(6) Compared the proposed financial terms of the transactions
contemplated by the Agreement with the financial terms of certain other
mergers and acquisitions which we deemed to be relevant;

(7) Considered the pro forma effect of the Merger on the Company's
capitalization ratios, earnings and cash flow;

(8) Considered a discounted cash flow analysis based on future cash
flows that management of the Subject Company expects the Subject Company to
generate;

(9) Reviewed a draft of the Agreement dated December 20, 1994; and

C-1-1
<PAGE> 69

(10) Reviewed such other financial studies and analyses and performed
such other investigations and took into account such other matters as we
deemed necessary, including our assessment of general economic, market and
monetary conditions.

In preparing our opinion, we have relied on the accuracy and completeness
of all information supplied or otherwise made available to us by the Subject
Company, and we have not assumed any responsibility to independently verify such
information or undertaken an independent appraisal of the assets of the Subject
Company. With respect to the financial forecasts furnished by the Subject
Company, we have assumed that they have been reasonably prepared and reflect the
best currently available estimates and judgment of the Subject Company's
management as to the expected future financial performance of the Subject
Company. This opinion does not address the relative merits of the Merger and any
other transactions or business strategies discussed by the Board of Directors of
the Company as alternatives to the Merger or the decision of the Board of
Directors of the Company to proceed with the Merger.

In rendering this opinion, we have not been engaged to act as an agent or
fiduciary of the Company's equity holders or any other third party.

We have, in the past, provided financial advisory services to the Subject
Company and have received fees for the meeting of such services.

On the basis of, and subject to the foregoing, we are of the opinion that
the proposed cash consideration to be paid pursuant to the Merger is fair to the
Company from a financial point of view.

Very truly yours,

MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED

By: /s/ ALAIN LEBEC
Managing Director
Investment Banking Group

C-1-2
<PAGE> 70

EXHIBIT C-2

OPINION OF PAINEWEBBER INCORPORATED

[PAINEWEBBER LETTERHEAD]

December 27, 1994 [PAINEWEBBER LOGO]

Board of Directors
GTE Corporation
One Stamford Forum
Stamford, CT 06904

Attention: J. Michael Kelly

Gentlemen:

Contel Corporation, a Delaware corporation ("Contel") and a wholly-owned
subsidiary of GTE Corporation (the "Company"), CCI Acquisition Company, a
Delaware corporation (the "Purchaser") and a wholly-owned subsidiary of Contel,
and Contel Cellular Inc,. a Delaware corporation (the "Subject Company"),
propose to enter into an Agreement and Plan of Merger (the "Agreement") pursuant
to which the Purchaser will be merged into the Subject Company in a transaction
(the "Merger") in which each share of the Subject Company's Class A Common
Stock, par value $1.00 per share (the "Shares"), will be converted into the
right to receive $25.50 in cash per Share.

You have asked us whether, in our opinion, the proposed cash consideration
to be paid for the Shares pursuant to the Merger is fair to the Company from a
financial point of view.

In arriving at the opinion set forth below, we have, among other things:

(2) Reviewed certain information, including financial forecasts,
relating to the business, earnings, cash flow, assets and prospects of the
Subject Company;

(3) Conducted discussions with members of senior management of the
Subject Company concerning its businesses and prospects;

(5) Compared the results of operations of the Subject Company with
that of certain companies which we deemed to be reasonably similar to the
Subject Company;

(6) Compared the proposed financial terms of the transactions
contemplated by the Agreement with the financial terms of certain other
mergers and acquisitions which we deemed to be relevant;

(7) Considered the pro forma effect of the Merger on the Company's
capitalization ratios, earnings and cash flow;

(8) Considered a discounted cash flow analysis based on future cash
flows that management of the Subject Company expects the Subject Company to
generate;

(9) Reviewed a draft of the Agreement dated December 20, 1994; and

C-2-1
<PAGE> 71

In preparing our opinion, we have relied on the accuracy and completeness
of all information supplied or otherwise made available to us by the Subject
Company, and we have not assumed any responsibility to independently verify such
information or undertaken an independent appraisal of the assets of the Subject
Company. With respect to the financial forecasts furnished by the Subject
Company, we have assumed that they have been reasonably prepared and reflect the
best currently available estimates and judgment of the Subject Company's
management as to the expected future performance of the Subject Company. This
opinion does not address the relative merits of the Merger and any other
transactions or business strategies discussed by the Board of Directors of the
Company as alternatives to the Merger or the decision of the Board of Directors
of the Company to proceed with the Merger.

In rendering this opinion, we have not been engaged to act as an agent or
fiduciary of the Company's equity holders or any other third party.

We have, in the past, provided financial advisory services to the Company
and have received fees for the rendering of such services.

On the basis of, and subject to the foregoing, we are of the opinion that
the proposed cash consideration to be paid pursuant to the Merger is fair to the
Company from a financial point of view.

Very truly yours,

PAINEWEBBER INCORPORATED

C-2-2
<PAGE> 72

EXHIBIT D

DELAWARE GENERAL CORPORATION LAW SECTION 262

SEC. 262. APPRAISAL RIGHTS.

(a) Any stockholder of a corporation of this State who holds shares of
stock on the date of the making of a demand pursuant to subsection (d) of this
section with respect to such shares, who continuously holds such shares through
the effective date of the merger or consolidation, who has otherwise complied
with subsection (d) of this section and who has neither voted in favor of the
merger or consolidation nor consented thereto in writing pursuant to sec.228 of
this title shall be entitled to an appraisal by the Court of Chancery of the
fair value of his shares of stock under the circumstances described in
subsections (b) and (c) of this section. As used in this section, the word
"stockholder" means a holder of record of stock in a stock corporation and also
a member of record of a nonstock corporation; the words "stock" and "share" mean
and include what is ordinarily meant by those words and also membership or
membership interest of a member of a nonstock corporation and the words
"depository receipt" mean a receipt or other instrument issued by a depository
representing an interest in one or more shares, or fractions thereof, solely of
a corporation, which stock is deposited with the depository.

(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to sec.251, 252, 254, 257, 258 or 263 of this title:

(1) Provided, however, that no appraisal rights under this section
shall be available for the shares of any class or series of stock, which
stock, or depository receipts in respect thereof, at the record date fixed
to determine the stockholders entitled to receive notice of and to vote at
the meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no
appraisal rights shall be available for any shares of stock of the
constituent corporation surviving a merger if the merger did not require
for its approval the vote of the holders of the surviving corporation as
provided in subsection (f) of sec.251 of this title.

(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required
by the terms of an agreement of merger or consolidation pursuant to
sec.sec.251, 252, 254, 257, 258 and 263 of this title to accept for such
stock anything except: a. shares of stock of the corporation surviving or
resulting from such merger or consolidation, or depository receipts in
respect thereof; b. Shares of stock of any other corporation, or depository
receipts in respect thereof, which shares of stock or depository receipts
at the effective date of the merger or consolidation will be either listed
on a national securities exchange or designated as a national market system
security on an interdealer quotation system by the National Association
of Securities Dealers, Inc. or held of record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a. and b. of this paragraph; or d.
Any combination of the shares of stock, depository receipts and cash in
lieu of fractional shares or fractional depository receipts described in
the foregoing subparagraphs a., b. and c. of this paragraph.

(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under sec.253 of this title is not owned by the
parent corporation immediately prior to the merger, appraisal rights shall
be available for the shares of the subsidiary Delaware corporation.

(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections (d) and
(e) of this section, shall apply as nearly as is practicable.

D-1
<PAGE> 73

(d) Appraisal rights shall be perfected as follows:

(1) If a proposed merger or consolidation for which appraisal rights
are provided under this section is to be submitted for approval at a
meeting of stockholders, the corporation, not less than 20 days prior to
the meeting, shall notify each of its stockholders who was such on the
record date for such meeting with respect to shares for which appraisal
rights are available pursuant to subsections (b) or (c) hereof that
appraisal rights are available for any or all of the shares of the
constituent corporations, and shall include in such notice a copy of this
section. Each stockholder electing to demand the appraisal of his shares
shall deliver to the corporation, before the taking of the vote on the
merger or consolidation, a written demand for appraisal of his shares. Such
demand will be sufficient if it reasonably informs the corporation of the
identity of the stockholder and that the stockholder intends thereby to
demand the appraisal of his shares. A proxy or vote against the merger or
consolidation shall not constitute such a demand. A stockholder electing to
take such action must do so by a separate written demand as herein
provided. Within 10 days after the effective date of such merger or
consolidation, the surviving or resulting corporation shall notify each
stockholder of each constituent corporation who has complied with this
subsection and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has become
effective; or

(2) If the merger or consolidation was approved pursuant to sec.228 or
253 of this title, the surviving or resulting corporation, either before
the effective date of the merger or consolidation or within 10 days
thereafter, shall notify each of the stockholders entitled to appraisal
rights of the effective date of the merger or consolidation and that
appraisal rights are available for any or all of the shares of the
constituent corporation, and shall include in such notice a copy of this
section. The notice shall be sent by certified or registered mail, return
receipt requested, addressed to the stockholder at his address as it
appears on the records of the corporation. Any stockholder entitled to
appraisal rights may, within 20 days after the date of mailing of the
notice, demand in writing from the surviving or resulting corporation the
appraisal of his share. Such demand will be sufficient if it reasonably
informs the corporation of the identity of the stockholder and that the
stockholder intends thereby to demand the appraisal of his shares.

(e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any stockholder who has
complied with subsections (a) and (d) hereof and who is otherwise entitled to
appraisal rights, may file a petition in the Court of Chancery demanding a
determination of the value of the stock of all such stockholders.
Notwithstanding the foregoing, at any time within 60 days after the effective
date of the merger or consolidation, any stockholder shall have the right to
withdraw his demand for appraisal and to accept the terms offered upon the
merger or consolidation. Within 120 days after the effective date of the merger
or consolidation, any stockholder who has complied with the requirements of
subsections (a) and (d) hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting from the
consolidation a statement setting forth the aggregate number of shares not
voted in favor of the merger or consolidation and with respect to which demands
for appraisal have been received and the aggregate number of holders of such
shares. Such written statement shall be mailed to the stockholder within 10 days
after his written request for such a statement is received by the surviving or
resulting corporation or within 10 days after expiration of the period for
delivery of demands for appraisal under subsection (d) hereof, whichever
is later.

(f) Upon the filing of any such petition by a stockholder, service of a
copy thereof shall be made upon the surviving or resulting corporation, which
shall within 20 days after such service file in the office of the Register in
Chancery in which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded payment for their
shares and with whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the petition shall be
filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in Chancery, if so
ordered by the Court, shall give notice of the time and place fixed for the
hearing of such petition by registered or certified mail to the surviving or
resulting corporation and to the stockholders shown on the list at the addresses
therein stated. Such notice shall also be given by 1 or more publications at
least 1 week before the day of the hearing, in a newspaper of general
circulation published in the City of Wilmington, Delaware or such publication as
the Court deems advisable. The forms of the notices by mail and by

D-2
<PAGE> 74

publications shall be approved by the Court, and the costs thereof shall be
borne by the surviving or resulting corporation.

(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled to
appraisal rights. The Court may require the stockholders who have demanded an
appraisal for their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such directions, the Court may dismiss the proceedings as
to such stockholder.

(h) After determining the stockholders, entitled to an appraisal, the
Court shall appraise the shares, determining their fair value exclusive of any
element of value arising from the accomplishment or expectation of the merger
or consolidation, together with a fair rate of interest, if any, to be paid
upon the amount determined to be the fair value. In determining such fair
value, the Court shall take into account all relevant factors. In determining
the fair rate of interest, the Court may consider all relevant factors,
including the rate of interest which the surviving or resulting corporation
would have had to pay to borrow money during the pendency of the proceeding.
Upon application by the surviving or resulting corporation or by any
stockholder entitled to participate in the appraisal proceeding, the Court may,
in its discretion, permit discovery or other pretrial proceedings and may
proceed to trial upon the appraisal prior to the final determination of the
stockholder entitled to an appraisal. Any stockholder whose name appears on the
list filed by the surviving or resulting corporation pursuant to subsection (f)
of this section and who has submitted his certificates of stock to the Register
in Chancery, if such is required, may participate fully in all proceedings
until it is finally determined that he is not entitled to appraisal rights
under this section.

(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
stockholders entitled thereto. Interest may be simple or compound, as the Court
may direct. Payment shall be so made to each such stockholder, in the case of
holders of uncertificated stock forthwith, and the case of holders of shares
represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as
other decrees in the Court of Chancery may be enforced, whether such surviving
or resulting corporation be a corporation of this State or of any state.

(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of the
shares entitled to an appraisal.

(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded his appraisal rights as provided in subsection (d)
of this section shall be entitled to vote such stock for any purpose or to
receive payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of record at a date
which is prior to the effective date of the merger or consolidation); provided,
however, that if no petition for an appraisal shall be filed within the time
provided in subsection (e) of this section, or if such stockholder shall deliver
to the surviving or resulting corporation a written withdrawal of his demand for
an appraisal and an acceptance of the merger or consolidation, either within 60
days after the effective date of the merger or consolidation as provided in
subsection (e) of this section or thereafter with the written approval of the
corporation, then the right of such stockholder to an appraisal shall cease.
Notwithstanding the foregoing, no appraisal proceeding in the Court of the
Chancery shall be dismissed as to any stockholder without the approval of the
Court, and such approval may be conditioned upon such terms as the Court deems
just.

(l) The shares of the surviving or resulting corporation to which the
shares of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized and
unissued shares of the surviving or resulting corporation.

D-3
<PAGE> 75

EXHIBIT E

DIRECTORS AND EXECUTIVE OFFICERS OF GTE CORPORATION,
CONTEL CORPORATION, CONTEL CELLULAR ACQUISITION
CORPORATION AND CONTEL CELLULAR INC.

1. Directors and Executive Officers of GTE Corporation. The following
table sets forth the name, business address, present principal occupation and
the other material occupations, positions, offices or employments for the past
five years (if applicable) of each director and executive officer of GTE
Corporation, a New York corporation ("GTE"). Each director and executive officer
of GTE is a citizen of the United States. GTE, through its subsidiaries,
provides local telephone service, cellular mobile telephone service,
directories, and other telecommunications related products and services. GTE
also has subsidiaries which offer financial and related services primarily to
GTE operating companies. The address of GTE's principal executive offices is One
Stamford Forum, Stamford, Connecticut 06904.

<TABLE>
<CAPTION>
PREVIOUS MATERIAL
NAME AND BUSINESS ADDRESS PRESENT PRINCIPAL OCCUPATION OCCUPATIONS
- ----------------------------------- ------------------------------ -------------------------
<S> <C> <C>
GTE -- DIRECTORS
Edwin L. Artzt..................... Chairman of the Board and Not applicable
The Procter & Gamble Company Chief Executive Officer of The
One Procter & Gamble Plaza Procter & Gamble Company
Cincinnati, OH 45202-3315

James R. Barker.................... Chairman of the Interlake Not applicable
Mormac Marine Group, Inc. Steamship Co.; Vice Chairman
Three Landmark Square of Mormac Marine Group, Inc.;
Stamford, CT 06901 Vice Chairman of Moran Towing
Company

Edward H. Budd..................... Chairman of the Board of the Chairman of Travelers
The Travelers Insurance Companies Executive Committee and Insurance Group, Inc.
One Tower Square Director of The Travelers from January 1994 to
Hartford, CT 06138-1100 Insurance Group, Inc. September 1994. Chairman
of The Travelers, Inc.
since 1982

Kent B. Foster..................... Vice Chairman of GTE and Not applicable
GTE Service Corporation President of GTE Telephone
600 Hidden Ridge, HQE04J17 Operations Group
Irving, TX 75308

James L. Johnson................... Chairman Emeritus of GTE since Chairman and Chief
GTE 1992 Executive of GTE since
600 Hidden Ridge 1988
Irving, TX 75038

Richard W. Jones................... Business Consultant, Not applicable
Business Consultant PaineWebber Incorporated
PaineWebber Incorporated
725 S. Figueroa Street
Suite 4100
Los Angeles, CA 90017

James L. Ketelsen.................. Retired Chairman of Tenneco Chairman and Chief
Tenneco Inc. Inc. since 1992 Executive Officer of
Tenneco Building Tenneco Inc. since 1978
1010 Milam Street
Houston, TX 77002

Charles R. Lee..................... Chairman and Chief Executive President and Chief
GTE Officer of GTE since 1992 Operating Officer of GTE
One Stamford Forum since 1989
Stamford, CT 06904
</TABLE>

E-1
<PAGE> 76

<TABLE>
<CAPTION>
PREVIOUS MATERIAL
NAME AND BUSINESS ADDRESS PRESENT PRINCIPAL OCCUPATION OCCUPATIONS
- ----------------------------------- ------------------------------ -------------------------
<S> <C> <C>
Michael T. Masin................... Vice Chairman of GTE since Managing Partner of the
GTE 1993 New York office of the
One Stamford Forum law firm of O'Melveny &
Stamford, CT 06904 Myers and a partner with
that firm since 1977

Sandra O. Moose.................... Senior Vice President and Not applicable
The Boston Consulting Group, Inc. Chair of the East Coast as
135 E. 57th Street well as New York Office
New York, NY 10022 Administrator and Director of
The Boston Consulting Group,
Inc.

Russell E. Palmer.................. Chairman and Chief Executive Dean, The Wharton School,
The Palmer Group Officer of The Palmer Group University of
3600 Market Street since 1990 Pennsylvania from 1983
Philadelphia, PA 19104 until 1990

Howard Sloan....................... Private Investor Not applicable
375 Park Avenue
New York, NY 10152

Robert D. Storey................... Partner with the Cleveland law Partner with the
Thompson, Hine & Flory firm of Thompson, Hine & Flory Cleveland law firm of
1100 National City Bank Bldg. since 1993 McDonald, Hopkins, Burke
629 Euclid Avenue & Haber Co., L.P.A. since
Cleveland, OH 44114 1971

James W. Walter.................... Chairman of Walter Industries, Not applicable
Walter Industries, Inc. Inc.
1500 N. Dale Mabry Highway
Tampa, FL 33607

Charles Wohlstetter................ Vice Chairman of GTE since Chairman of the Board of
GTE 1991 Contel Corporation since
375 Park Avenue 1960
New York, NY 10152

GTE -- EXECUTIVE OFFICERS

Charles R. Lee..................... See prior entry See prior entry
GTE
One Stamford Forum
Stanford, CT 06904

Charles Wohlstetter................ See prior entry See prior entry
GTE
375 Park Avenue
New York, NY 10152

Kent B. Foster..................... See prior entry See prior entry
GTE
600 Hidden Ridge
Irving, TX 75308

Michael T. Masin................... See prior entry See prior entry
GTE
One Stamford Forum
Stanford, CT 06904

Nicholas L. Trivisonno............. Executive Vice President - Senior Vice President -
GTE Strategic Planning and Group Finance since 1989
One Stamford Forum President of GTE since 1993
Stamford, CT 06904
</TABLE>

E-2
<PAGE> 77

<TABLE>
<CAPTION>
PREVIOUS MATERIAL
NAME AND BUSINESS ADDRESS PRESENT PRINCIPAL OCCUPATION OCCUPATIONS
- ----------------------------------- ------------------------------ -------------------------
<S> <C> <C>
William P. Barr.................... Senior Vice President and Partner in the Washington
GTE General Counsel of GTE since D.C. office of the law
One Stamford Forum 1994 firm of Shaw, Pittman,
Stamford, CT 06904 Potts & Trowbridge since
1993; Attorney General of
the United States from
1991 to 1993; previously
Deputy Attorney General
of the United States

Bruce Carswell..................... Senior Vice President - Human Not applicable
GTE Resources and Administration
One Stamford Forum of GTE
Stamford, CT 06904

J. Michael Kelly................... Senior Vice Vice President and
GTE President - Finance of GTE Controller of GTE since
One Stamford Forum since 1994 December 1991; Vice
Stamford, CT 06904 President - Finance and
Business Development for
GTE Telecommunications
Products and Services
Group since 1991; Vice
President and Controller
for Contel Corporation
since 1990

Terry S. Parker(1)................. Senior Vice President of GTE President - GTE
GTE since 1993 and President of Telecommunications
245 Perimeter Center Parkway Personal Communications Products and Services
Atlanta, GA 30346 Services of GTE Service Group since 1990
Corporation since 1993

Jeffrey S. Rubin................... Senior Vice Executive Vice President
GTE President - Corporate Planning and Chief Financial
One Stamford Forum and Development of GTE since Officer of NYNEX
Stamford, CT 06904 1994 Corporation which he
joined in 1990 as Vice
President Finance

John P.Z. Kent..................... Vice President - Taxes of GTE Not applicable
GTE
One Stamford Forum
Stamford, CT 06904

James Murphy....................... Vice President and Treasurer Not applicable
GTE of GTE
One Stamford Forum
Stamford, CT 06904

G. Bruce Redditt................... Vice President - Public Vice President - Public
GTE Affairs and Communications of Affairs for the Telephone
One Stamford Forum GTE since 1994 Operations Group of GTE
Stamford, CT 06904 Service Corporation since
1991, previously Vice
President - Corporate
Communications for Contel
Corporation

Samuel F. Shawhan, Jr.............. Vice President - Government Not applicable
GTE Affairs of GTE
1850 M Street, N.W.
Washington, D.C. 20036
</TABLE>

E-3
<PAGE> 78

<TABLE>
<CAPTION>
PREVIOUS MATERIAL
NAME AND BUSINESS ADDRESS PRESENT PRINCIPAL OCCUPATION OCCUPATIONS
- ----------------------------------- ------------------------------ -------------------------
<S> <C> <C>
William D. Wilson.................. Vice President and Controller Area Vice President -
GTE of GTE since 1994 General Manager for the
One Stamford Forum East Area of the
Stamford, CT 06904 Telephone Operations
Group of GTE Service
Corporation since 1993;
previously Vice
President - Business
Planning for the
Telephone Operations
Group of GTE Service
Corporation

Marianne Drost..................... Secretary of GTE Not applicable
GTE
One Stamford Forum
Stamford, CT 06904
</TABLE>

2. Directors and Executive Officers of Contel Corporation. The following
table sets forth the name, business address, present principal occupation and
the other material occupations, positions, offices or employments for the past
five years (if applicable) of each director and executive officer of Contel
Corporation, a Delaware corporation ("Contel"). Each director and executive
officer of Contel is a citizen of the United States. Contel, through its
subsidiaries, provides telecommunications products and services. The address of
Contel's principal executive offices is One Stamford Forum, Stamford,
Connecticut 06904.

CONTEL CORPORATION -- DIRECTORS
<TABLE>
<S> <C> <C>
Bruce Carswell..................... See prior entry See prior entry
Contel Corporation
One Stamford Forum
Stamford, CT 06904

Charles R. Lee..................... See prior entry See prior entry
Contel Corporation
One Stamford Forum
Stamford, CT 06904

Nicholas L. Trivisonno............. See prior entry See prior entry
Contel Corporation
One Stamford Forum
Stamford, CT 06904

CONTEL CORPORATION -- EXECUTIVE
OFFICERS
J. Michael Kelly................... See prior entry See prior entry
President
Contel Corporation
One Stamford Forum
Stamford, CT 06904

James Murphy....................... See prior entry See prior entry
Vice President and Treasurer
Contel Corporation
One Stamford Forum
Stamford, CT 06904

Marianne Drost..................... See prior entry See prior entry
Secretary
Contel Corporation
One Stamford Forum
Stamford, CT 06904
</TABLE>

3. Directors and Executive Officers of Contel Cellular Acquisition
Corporation. The following table sets forth the name, business address, present
principal occupation and the other material occupations, positions, offices or
employments for the past five years (if applicable) of each director and
executive officer of Contel Cellular Acquisition Corporation, a Delaware
corporation ("CCI Acquisition"). Each director and executive

E-4
<PAGE> 79

officer is a citizen of the United States. CCI Acquisition was incorporated in
December 1994 for the purpose of acquiring the Company and has not engaged in
any business activities other than those relating to the Merger. The address of
CCI Acquisition's principal executive office is One Stamford Forum, Stamford,
Connecticut 06904.

<TABLE>
<CAPTION>
PREVIOUS MATERIAL
NAME AND BUSINESS ADDRESS PRESENT PRINCIPAL OCCUPATION OCCUPATIONS
- ----------------------------------- ------------------------------ -------------------------
<S> <C> <C>
CCI ACQUISITION -- DIRECTORS
J. Michael Kelly................... See prior entry See prior entry
CCI Acquisition
One Stamford Forum
Stamford, CT 06904

James Murphy....................... See prior entry See prior entry
CCI Acquisition
One Stamford Forum
Stamford, CT 06904

Marianne Drost..................... See prior entry See prior entry
CCI Acquisition
One Stamford Forum
Stamford, CT 06904
</TABLE>

CCI ACQUISITION -- EXECUTIVE OFFICERS

<TABLE>
<S> <C> <C>
J. Michael Kelly................... See prior entry See prior entry
President
CCI Acquisition
One Stamford Forum
Stamford, CT 06904

James Murphy....................... See prior entry See prior entry
Vice President and Treasurer
CCI Acquisition
One Stamford Forum
Stamford, CT 06904

Marianne Drost..................... See prior entry See prior entry
Secretary
CCI Acquisition
One Stamford Forum
Stamford, CT 06904
</TABLE>

4. Directors and Executive Officers of Contel Cellular Inc. The following
table sets forth the name, business address, present principal occupation and
the other material occupations, positions, offices or employments (if
applicable) for the past five years of each director and executive officer of
Contel Cellular Inc., a Delaware corporation (the "Company"). Each director and
executive officer of the Company is a citizen of the United States. The Company,
through its subsidiaries and through partnerships, provides or participates in
the provision of cellular telephone service in various areas throughout the
United States. The address of the Company's principal executive offices is 245
Perimeter Center Parkway, Atlanta, Georgia 30346.

COMPANY -- DIRECTORS

<TABLE>
<CAPTION>
PREVIOUS MATERIAL
NAME AND BUSINESS ADDRESS PRESENT PRINCIPAL OCCUPATION OCCUPATIONS
- ----------------------------------- ------------------------------ -------------------------
<S> <C> <C>
Leo Jaffe.......................... Chairman Emeritus of Columbia Not applicable
425 East 58th Street Pictures, Inc.
New York, NY 10022

James L. Johnson................... See prior entry See prior entry
GTE
600 Hidden Ridge
Irving, TX 75038
</TABLE>

E-5
<PAGE> 80

<TABLE>
<CAPTION>
PREVIOUS MATERIAL
NAME AND BUSINESS ADDRESS PRESENT PRINCIPAL OCCUPATION OCCUPATIONS
- ----------------------------------- ------------------------------ -------------------------
<S> <C> <C>
Robert LaBlanc..................... President of Robert E. LaBlanc Not applicable
323 Highland Avenue Associates, Inc.
Ridgewood, NJ 07450

Charles R. Lee..................... See prior entry See prior entry
GTE
One Stamford Forum
Stamford, CT 06904

Michael T. Masin................... See prior entry See prior entry
GTE
One Stamford Forum
Stamford, CT 06904

Russell E. Palmer.................. See prior entry See prior entry
The Palmer Group
3600 Market Street
Philadelphia, PA 19104

Terry S. Parker(1)................. See prior entry See prior entry
GTE Telecommunications Products &
Services
245 Perimeter Center Parkway
Atlanta, GA 30346

Irwin Schneiderman................. Senior Counsel of the law firm Not applicable
Cahill Gordon & Reindel of Cahill Gordon & Reindel
80 Pine Street
New York, NY 10005

Nicholas L. Trivisonno............. See prior entry See prior entry
GTE
One Stamford Forum
Stamford, CT 06904

James W. Walter.................... See prior entry See prior entry
Walter Industries Inc.
1500 N. Dale Mabry Highway
Tampa, FL 33607

Dennis L. Whipple.................. President and Chief Executive Vice
Contel Cellular Inc. Officer of the Company since President - Marketing and
245 Perimeter Center Parkway 1991 Business Planning for GTE
Atlanta, GA 30346 Mobile from April 1990 to
March 1991; previously
General Manager - Florida
of GTE Mobilnet

Charles Wohlstetter................ See prior entry See prior entry
GTE
375 Park Avenue
New York, NY 10152-0192

COMPANY -- EXECUTIVE OFFICERS

Terry S. Parker(1)................. See prior entry See prior entry
Chairman
Contel Cellular Inc.
245 Perimeter Center Parkway
Atlanta, GA 30346

Dennis L. Whipple.................. See prior entry See prior entry
President and Chief Executive
Officer
Contel Cellular Inc.
245 Perimeter Center Parkway
Atlanta, GA 30346
</TABLE>

E-6
<PAGE> 81

<TABLE>
<CAPTION>
PREVIOUS MATERIAL
NAME AND BUSINESS ADDRESS PRESENT PRINCIPAL OCCUPATION OCCUPATIONS
- ----------------------------------- ------------------------------ -------------------------
<S> <C> <C>
Theodore J. Carrier................ Treasurer and Chief Financial Controller of the Company
Treasurer and Chief Financial Officer of the Company since
Officer 1991
Contel Cellular Inc.
245 Perimeter Center Parkway
Atlanta, GA 30346

Pamela F. Lopez.................... Vice President - Marketing of Marketing and
Vice President - Marketing the Company since 1993 Distribution Manager of
Contel Cellular Inc. the Company's National
245 Perimeter Center Parkway Region since 1991;
Atlanta, GA 30346 previously Regional Agent
Manager in the Company's
Virginia operation

Randall L. Crouse.................. Vice President - Network Director - Technology
Vice President - Network Operations Operations of the Company Projects for GTE Mobile
Contel Cellular Inc. since 1993 from 1991 to 1993;
245 Perimeter Center Parkway previously Director -
Atlanta, GA 30346 Advanced Technology
Planning for GTE Mobile

John P.Z. Kent..................... See prior entry See prior entry
Vice President - Taxes
Contel Cellular Inc.
One Stamford Forum
Stamford, CT 06904

Jay M. Rosen....................... Vice President, Government Vice President and
Secretary Affairs and General Counsel, Associate General
Contel Cellular Inc. Telecommunications Products Counsel - GTE Electrical
One Stamford Forum and Services Group of GTE Products and Governmental
Stamford, CT 06904 Service Corporation since 1991 Systems Group

Laura E. Binion.................... General Counsel and Assistant Corporate Counsel of
General Counsel and Assistant Secretary of the Company since Contel
Secretary 1991
Contel Cellular Inc.
245 Perimeter Center Parkway
Atlanta, GA 30346
</TABLE>

- ---------------
(1) Mr. Parker will retire from his positions with GTE and its subsidiaries
effective March 1, 1995.

E-7
<PAGE> 82

EXHIBIT F

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors
and Stockholders of
Contel Cellular Inc.:

We have audited the consolidated balance sheets of CONTEL CELLULAR INC. (a
Delaware corporation and majority owned subsidiary of GTE Corporation) AND
SUBSIDIARIES as of December 31, 1993 and 1992 and the related consolidated
statements of operations, changes in stockholders' equity, and cash flows for
each of the three years in the period ended December 31, 1993. 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 did not audit the financial statements of certain unconsolidated
partnerships as described in Note 4 to the financial statements. The investment
in these partnerships is reflected in the accompanying balance sheets using the
equity method of accounting and represented $82,140,000 and $62,543,000 (or 4%
and 3% respectively) of total consolidated assets at December 31, 1993 and 1992,
respectively. The equity in their earnings is included in the statements of
operations and represented $28,024,000, $20,070,000, and $16,570,000 for the
years ended December 31, 1993, 1992, and 1991, respectively. The summarized
financial information contained in Note 4 to the consolidated financial
statements includes financial information for the aforementioned partnerships.
The financial statements of these unconsolidated partnerships were audited by
other auditors whose reports have been furnished to us, and our opinion, insofar
as it relates to the amounts included for these unconsolidated partnerships, is
based solely on the reports of the other auditors.

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, based on our audits and the reports of the other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of Contel Cellular Inc. and subsidiaries as of December
31, 1993 and 1992 and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 1993 in conformity with
generally accepted accounting principles.

A report of other auditors referred to above indicates that the Los Angeles SMSA
Limited Partnership is involved in litigation with several agents as discussed
in Note 4 and Note 14 and with cellular subscribers as discussed in Note 8 and
Note 14, the outcome of which cannot presently be determined. Accordingly, no
provision for any liability that may result upon adjudication has been made in
the accompanying financial statements.

F-1
<PAGE> 83

As discussed in Note 14, the cellular partnership in San Francisco, California,
of which the Company holds a non-controlling interest, is involved in litigation
with a class of cellular subscribers, the outcome of which cannot presently be
determined. Accordingly, no provision for any liability that may result upon
adjudication has been made in the accompanying financial statements.

As discussed in Note 3 to the financial statements, effective January 1, 1992,
the Company changed its method of accounting for postretirement benefits other
than pensions.

/s/ ARTHUR ANDERSEN LLP

ARTHUR ANDERSEN LLP

Atlanta, Georgia
March 25, 1994
(except with respect to the matters discussed in
Note 14, as to which the date is January 25, 1995)

F-2