SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 23, 1996
RURAL CELLULAR CORPORATION
(Exact name of Registrant as Specified in its Charter)
Minnesota
(State or Other Jurisdiction of Incorporation)
0-27416 41-1693295
(Commission File Number) (IRS Employer Identification No.
2819 Highway 29 South, Alexandria, Minnesota 56308
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone number, Including Area Code (320) 762-2000
Not Applicable
Former Name or Former Address, if Changed Since Last Report
Item 5. Other Events.
On August 23, 1996, the Registrant and American Portable Telecom Inc.
("APT"), a subsidiary of Telephone & Data Systems, Inc., filed with the Federal
Communications Commission to obtain appropriate approvals for the formation of a
joint venture named Wireless Alliance LLC ("Wireless Alliance") to construct and
operate Personal Communications Service ("PCS") networks in Duluth, Minnesota,
Fargo and Grand Forks, North Dakota, and Superior, Wisconsin. Wireless Alliance
will use 20 MHz of APT's 30 MHz broadband spectrum within the Duluth-Superior,
Fargo and Grand Forks portions of APT's Minneapolis Major Trading Area PCS
license. The Registrant will be responsible for managing the network.
Consummation of the joint venture is contingent upon the negotiation
and execution of definitive agreements and regulatory approvals.
A press release providing additional information is filed herewith as
Exhibit 99.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
99 -- Press release dated August 26, 1996,
announcing joint venture
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RURAL CELLULAR CORPORATION.
By /s/ Richard Ekstrand
Richard Ekstrand
Its President
Dated: August 28,1996
EXHIBIT 99
FOR IMMEDIATE RELEASE
RURAL CELLULAR CORP. & AMERICAN PORTABLE TELECOM PLAN JOINT VENTURE TO PROVIDE
WIRELESS PCS SERVICE IN RURAL MINNESOTA, NORTH DAKOTA AND WISCONSIN
PCS SYSTEMS IN DULUTH-SUPERIOR, FARGO AND GRAND FORKS WILL BE
AMONG NATION'S FIRST IN RURAL MARKETS
AUGUST 26, 1996, ALEXANDRIA, MINNESOTA -- Rural Cellular Corporation -- RCC --
(Nasdaq National Market: RCCC] and American Portable Telecom, Inc. -- APT --
(Nasdaq National Market: APTI] today announced the signing of a letter of intent
(LOI) to establish a joint venture named Wireless Alliance, LLC. The Wireless
Alliance will construct and operate Personal Communications Service (PCS)
networks in Duluth, Minnesota, Fargo and Grand Forks, North Dakota and Superior,
Wisconsin. The agreement is expected to open important new PCS markets for the
companies, adding significant value to both, and will more than double the
population base currently served by RCC's operations.
Subject to a definitive agreement requiring regulatory approvals, Wireless
Alliance will be 51 percent owned by RCC and 49 percent owned by APT. Under
terms of the LOI, the Wireless Alliance will use 20 megahertz of APT's 30 MHz
broadband spectrum within the Duluth-Superior, Fargo and Grand Forks portions of
the company's Minneapolis Major Trading Area License.
RCC will be responsible for managing Wireless Alliance.
Designed for business, residential and mobile applications, the new rural PCS
systems will be among the first of their kind in the nation. Seen as the next
generation of digital wireless communications service, PCS is currently
operational in several major cities in the U.S. and worldwide.
Like APT's other PCS networks, the new rural networks will use GSM (Global
System for Mobile communications) technology. In commercial service since 1992,
GSM is the most widely accepted PCS standard, used around the world by more than
162 PCS carriers.
The Wireless Alliance network for Duluth-Superior is expected to be fully
operational late in 1997, followed by system roll-outs in Fargo and Grand Forks.
"By allowing RCC to expand its current coverage into new markets where we do not
hold cellular licenses, the joint venture will enable us to fulfill the
expectations of our customers and shareholders," said Richard Ekstrand, RCC's
president and chief executive officer. "As a result, we expect to realize
significant economies of scale by leveraging our sales and marketing team and
extensive infrastructure over a much larger base of potential subscribers."
"Moreover, we're delighted to be aligned with APT in this venture. Like RCC,
they are an aggressive, innovative, entrepreneurial company dedicated to the
customer. This will be an exciting partnership."
Said Don Warkentin, APT's president and CEO, "This is definitely a win-win
agreement for both companies. RCC will expand its market, while APT rapidly
expands its GSM footprint, by providing state-of-the-art wireless communications
service to several rural markets much sooner than would otherwise have been
possible."
"RCC is a great marketing partner; the very best partner to be working with in
these areas. They've been tremendously successful in their markets and we see
wonderful synergy's between our companies."
GSM networks such as the ones planned under the joint venture offer greatly
enhanced functionality over conventional wireless systems. In addition to voice
service, GSM's advanced features include high-speed data, fax and two-way text
messaging, as well as Smart Card capabilities. Digital GSM networks also offer
calling features such as Caller ID, call-forwarding and call waiting, among
others. Like cellular, PCS provides great mobility and compatibility with other
telephone networks.
RCC said long-term financing to support construction of the PCS network has
received preliminary approval. Interest and operating expenses related to this
financing will have minimal impact on RCC's 1996 operating results.
American Portable Telecom is a majority owned subsidiary of Telephone and Data
Systems, Inc. (TDS), a $1 billion-a-year telecommunications company based in
Chicago. In April 1996, TDS [AMEX:TDS] sold 17.2 percent of APT in an initial
public offering. The company has licenses to provide PCS service in major
trading areas covering 27.3 million of the U.S. population. APT's markets
include Columbus, Houston, Minneapolis-St. Paul, Pittsburgh and Tampa-St.
Petersburg-Orlando. APT also plans to construct networks for its PCS markets
using GSM technology, and intends to launch commercial service by early 1997.
Rural Cellular Corporation (RCC) was formed in 1990 when 40 independent
telephone companies in northern Minnesota merged their cellular interests. RCC
became a publicly-traded company in February 1996 through an initial public
offering. RCC provides cellular communication services throughout most of
northern Minnesota and a paging service in northern Minnesota and eastern North
Dakota. RCC markets its cellular services under "Cellular 2000 (R)" and its
paging services under "KEYPAGE(R)."
# # #
Contacts:
RCC: Richard Ekstrand APT: J. Clarke Smith
President/CEO Vice President, Finance and Admin.
320-762-2000 312-399-4367
Also: Ann Elliott Also: Arianne Venuso
Manager, Corporate Communications Public Relations
320-762-2000 312-399-4184
