PRICELLULAR CORP, S-3/A, 1996-06-07

PRICELLULAR CORP
S-3/A, 1996-06-07
RADIOTELEPHONE COMMUNICATIONS

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 7, 1996

REGISTRATION NO. 333-03737

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

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 1

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

PRICELLULAR CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C>
DELAWARE 22-3043811
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>

PRICELLULAR CORPORATION
45 ROCKEFELLER PLAZA
NEW YORK, NEW YORK 10020
(212) 459-0800
(ADDRESS AND TELEPHONE NUMBER OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)

ROBERT PRICE
PRICELLULAR CORPORATION
45 ROCKEFELLER PLAZA
NEW YORK, NEW YORK 10020
(212) 459-0800
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)

Copies to:

<TABLE>
<S> <C>
RICHARD D. TRUESDELL, JR. JOHN T. GAFFNEY
DAVIS POLK & WARDWELL CRAVATH, SWAINE & MOORE
450 LEXINGTON AVENUE 825 EIGHTH AVENUE
NEW YORK, NEW YORK 10017 NEW YORK, NEW YORK 10019
(212) 450-4000 (212) 474-1000
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.

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

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

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

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

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

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

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

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<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED JUNE 10, 1996

3,600,000 SHARES

PRICELLULAR

PRICELLULAR CORPORATION

CLASS A COMMON STOCK
(PAR VALUE $.01 PER SHARE)
---------------------

All of the 3,600,000 shares of Class A Common Stock offered hereby are
being sold by the Selling Stockholders. See "Principal and Selling
Stockholders". The Company will not receive any of the proceeds from the sale of
the shares.

The Company's Class A Common Stock is traded on the American Stock Exchange
under the symbol "PC". On June 6, 1996, the last reported sale price of the
Class A Common Stock on the American Stock Exchange Composite Tape was $13 5/8
per share. See "Price Range of Class A Common Stock and Dividend Policy".

The Company's authorized capital stock includes Class A Common Stock and
Class B Common Stock. The rights of Class A Common Stock and Class B Common
Stock are substantially identical, except that holders of the Class A Common
Stock are entitled to one vote per share while holders of Class B Common Stock
are entitled to 10 votes per share and shares of Class B Common Stock are
convertible at any time into shares of Class A Common Stock on a share-for-share
basis. Both classes vote together as one class on all matters generally
submitted to a vote of stockholders, including the election of directors. See
"Description of Capital Stock".

SEE "RISK FACTORS" BEGINNING ON PAGE 13 FOR CERTAIN CONSIDERATIONS RELEVANT
TO AN INVESTMENT IN THE CLASS A COMMON STOCK.
---------------------

THESE SECURITIES HAVE NOT BEEN APPROVED NOR DISAPPROVED BY THE SECURITIES

AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------

<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO SELLING
OFFERING PRICE DISCOUNT(1) STOCKHOLDERS(2)
--------------------- --------------------- ---------------------
<S> <C> <C> <C>
Per Share................... $ $ $
Total(3).................... $ $ $
</TABLE>

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

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

(3) The Selling Stockholders have granted the Underwriters options for 30 days
to purchase up to an additional 540,000 shares at the initial public
offering price per share, less the underwriting discount, solely to cover
over-allotments. If such options are exercised in full, the total initial
public offering price, underwriting discount and proceeds to Selling
Stockholders will be $ , $ and $ , respectively.
See "Underwriting".

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

The shares offered hereby are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to their
right to reject any order in whole or in part. It is expected that certificates
for the shares offered hereby will be ready for delivery in New York, New York
on or about , 1996, against payment therefor in immediately
available funds.

GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
PAINEWEBBER INCORPORATED
---------------------

The date of this Prospectus is , 1996.
<PAGE> 3

ADDITIONAL INFORMATION

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

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

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The Company hereby incorporates in this Prospectus by reference thereto and
makes a part hereof the following documents, heretofore filed with the
Commission pursuant to the Exchange Act: (i) the Company's Annual Report on Form
10-K for the year ended December 31, 1995; (ii) the Company's Quarterly Report
on Form 10-Q for the three months ended March 31, 1996; (iii) the Company's
Proxy Statement for the 1996 Annual Meeting of Stockholders; (iv) the
description of the Class A Common Stock contained in the Company's Registration
Statement on Form 8-A filed on December 8, 1994; (v) the Company's Current
Report on Form 8-K filed on May 8, 1996; (vi) the Company's Current Report on
Form 8-K filed on May 14, 1996; and (vii) pages F-27 through F-76, F-82 through
F-148 and F-155 through F-164 contained in the Prospectus included in the
Company's Registration Statement on Form S-4 (Reg. No. 33-91006) at
effectiveness.

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

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

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

2
<PAGE> 4

PROSPECTUS SUMMARY

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

THE COMPANY

PriCellular, through its subsidiaries, owns and operates FCC licensed
cellular telephone systems in the United States, primarily in smaller MSAs and
strategically located RSAs. The Company operates its Systems principally in the
Midwest and Mid-Atlantic regions in addition to markets north of New York City
and south of Albany, NY. As of April 30, 1996, the Company owned cellular
interests representing approximately 4.0 million Net Pops and had over 100,000
subscribers before giving effect to the Pending Transactions. The Company sells
and markets its products and services principally under the CELLULAR ONE(R)
brand name through a distribution network of over 50 full service retail stores,
a direct sales force and a select group of agents. In addition, the Company has
formed a strategic alliance with AT&T Wireless Services, Inc. ("McCaw/AT&T
Wireless"), a principal stockholder, allowing it to take advantage of McCaw/AT&T
Wireless' acquisition experience, vendor discounts, centralized "back office"
functions and joint marketing opportunities in markets which are adjacent to
McCaw/AT&T Wireless markets.

Through selective acquisitions and asset swaps, the Company has
concentrated its efforts on creating an integrated network of cellular systems
in contiguous service areas. After giving effect to the Pending Transactions,
each of which is subject to certain conditions, including FCC approval, the
Company will own cellular interests representing approximately 4.0 million Net
Pops with over 100,000 subscribers, representing a penetration rate of 2.6%.
These interests consist principally of three large operating clusters of
cellular Systems:

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

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

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

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

During 1995, the Company's customer base increased from 17,344 to 78,227.
This significant growth in subscribers was due to both acquisitions and
increased penetration of its existing markets. As of December 31, 1995, revenues
and EBITDA of the Company were $41.5 million and $9.9 million, respectively, and
for the three months ended March 31, 1996 were $21.3 million and $6.4 million,
respectively, in each case before giving effect to the Pending Transactions. On
a pro forma basis, after giving effect to the Recent Acquisitions and the
Pending Transactions, the revenues and EBITDA of the Company for 1995 were $71.9
million and $19.7 million, respectively, and for the three months ended March
31, 1996 were $22.8 million and $7.0 million, respectively. See "Unaudited Pro
Forma Condensed Consolidated Financial Statements".

3
<PAGE> 5

CELLULAR MARKETS AND SYSTEMS

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

<TABLE>
<CAPTION>
TOTAL DATE OF
MARKET(A) POPS OWNERSHIP NET POPS ACQUISITION
- -------------------------------------------------- --------- --------- --------- -----------
<S> <C> <C> <C> <C>
UPPER MIDWEST CLUSTER
Duluth, MN/Superior, WI MSA..................... 241,467 100.0% 241,467 04/28/94
Eau Claire, WI MSA.............................. 143,190 97.1% 139,610 04/28/94
Wausau, WI MSA.................................. 121,262 94.4% 114,483 03/28/95
MN-2A RSA....................................... 38,236 100.0% 38,236 07/07/95
MN-3 RSA........................................ 59,388 100.0% 59,388 04/28/94
MN-4 RSA........................................ 15,075 49.0% 7,387 07/27/95
MN-5 RSA........................................ 205,456 100.0% 205,456 07/07/95
MN-6 RSA........................................ 219,149 100.0% 219,149 11/23/94(b)
WI-1 RSA........................................ 109,248 100.0% 109,248 04/28/94
WI-2 RSA........................................ 84,925(c) 100.0% 84,925(c) pending(d)
WI-3 RSA........................................ 139,189 100.0% 139,189 11/23/94(b)
WI-6A RSA....................................... 32,734 100.0% 32,734 11/23/94(b)
MI-1 RSA........................................ 208,779 100.0% 208,779 03/07/95
MID-ATLANTIC CLUSTER
OH-7 RSA........................................ 254,949 100.0% 254,949 09/27/95
OH-10A RSA...................................... 61,785 100.0% 61,785 09/29/95
PA-9 RSA........................................ 187,551 100.0% 187,551 02/02/96
WV-2 RSA........................................ 79,307 100.0% 79,307 12/20/95
WV-3 RSA........................................ 269,413 100.0% 269,413 pending(d)
NEW YORK CLUSTER
Orange County, NY MSA........................... 324,323 100.0% 324,323 pending(d)
Poughkeepsie, NY MSA............................ 262,663 94.8% 248,932 04/23/96(e)
NY-5 RSA........................................ 383,960 100.0% 383,960 12/29/95
NY-6 RSA........................................ 111,023 100.0% 111,023 04/23/96
SBC JOINT VENTURE
Laredo, TX MSA.................................. 168,924 44.5% 75,171 11/30/95(b)
IL-4 RSA........................................ 216,023 44.5% 96,130 11/30/95(b)
IL-6 RSA........................................ 199,453 44.5% 88,757 11/30/95(b)
OTHER INTERESTS
Florence, AL MSA................................ 136,816 100.0% 136,816 11/23/94(b)
AL-1B RSA....................................... 62,035 100.0% 62,035 11/23/94(b)
Kankakee, IL MSA................................ 102,541 20.0% 20,534 07/09/94
Alton/Granite City, IL MSA...................... 21,159 85.6% 18,112 07/07/95
Janesville, WI MSA.............................. 147,650 12.2% 18,003 pending(d)
Benton Harbor, MI MSA........................... 161,966 10.0% 16,157 07/09/94
Other Minority Interests........................ n/a n/a 17,997 pending(d)
--------- ---------
Total.................................... 4,769,639 4,071,006
========= =========
</TABLE>

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

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

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

4
<PAGE> 6

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

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

ACQUISITION STRATEGY

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

OPERATING STRATEGY

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

Decentralized Management.

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

Aggressive Marketing and Promoting of Cellular Service.

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

5
<PAGE> 7

cellular system as the local service provider often contrasts with its larger
competitors, which frequently centralize customer service and other functions
outside the local market.

Strong Retail and Direct Sales Effort.

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

Dedication to Customer Service.

The Company strives to maintain a high level of customer satisfaction
through a variety of techniques, including tying sales commissions to subscriber
retention, outbound telemarketing to subscribers on a regular basis, maintaining
24-hour customer service and active ongoing contact with new customers. The
Company believes that its emphasis on superior customer service has helped
reduce its average monthly churn rate. For example, in the 14 Systems owned or
contracted for by the Company at the time of its initial public offering in
December 1994 (the "IPO Systems"), the churn rate declined from 2.5% for the
three months ended March 31, 1995 to 1.6% for the three months ended March 31,
1996.

System Expansion to Increase Signal Coverage.

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

SIGNIFICANT PENDING TRANSACTIONS

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

The Company believes that the Pending Transactions described below support
the Company's acquisition strategy. The Systems to be acquired increase the size
of two of the Company's operating clusters, more closely surround major
metropolitan markets and afford opportunities for increased marketing and
engineering synergies. The Systems to be disposed of are considered
non-strategic and will allow the Company to redeploy its assets in more
strategic Systems.

6
<PAGE> 8

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

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

Expansion of the Mid-Atlantic Cluster -- The WV-3 Acquisition

The Company has reached agreement with a subsidiary of Horizon Cellular
Telephone Company, L.P. to acquire, subject to certain conditions including FCC
approval, the WV-3 RSA (269,413 Pops) for $35 million in cash. The WV-3 RSA is
situated directly south of the Company's PA-9 RSA and directly east of the
Company's WV-2 RSA. There can be no assurance that the foregoing transaction,
which is referred to herein as the "WV-3 Acquisition", will be consummated.

The AL-4 Disposition

The Company has reached agreement with Mercury, Inc. to sell, subject to
certain conditions including FCC approval, its recently-acquired AL-4 RSA
(140,200 Pops) for $27.5 million (of which $2.5 million is allocated to a two
year covenant not to compete) or approximately $200 per Pop. The Company
acquired this stand-alone RSA in November 1995 from Dominion Cellular, Inc. for
$10 million in cash and $10 million in a 5-year, 4% Note that was subsequently
converted into 1,468,860 shares of Class A Common Stock of PriCellular. There
can be no assurance that the foregoing transaction, which is referred to herein
as the "AL-4 Disposition", will be consummated.

OWNERSHIP PROFILE

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

RELATIONSHIP WITH MCCAW/AT&T WIRELESS

The Company has formed a strategic alliance with McCaw/AT&T Wireless which
allows the Company to take advantage of McCaw/AT&T Wireless' acquisition
experience, certain vendor discounts and certain services provided by McCaw/AT&T
Wireless including a variety of centralized "back office" functions. In
connection with its initial investment in the Company, McCaw/AT&T Wireless
contributed a Northern Telecom digital supernode switch and approximately 100
cell sites to the Company. The Company believes that the proximity of each of
its operating clusters to McCaw/AT&T Wireless' Systems affords significant
opportunities for joint marketing, promotions and other programs. The Company's
Upper Midwest Cluster is contiguous to McCaw/AT&T Wireless' Systems serving the
Minneapolis/St. Paul, MN MSA and the St. Cloud, MN MSA. The

7
<PAGE> 9

Company's Mid-Atlantic Cluster borders the Pittsburgh, PA, Steubenville, OH MSA
and Wheeling, WV MSAs, which are owned by McCaw/AT&T Wireless. The Company's New
York Cluster abuts the northern border of McCaw/AT&T Wireless' New York City
MSA, including Westchester and Rockland counties. The New York Cluster is also
adjacent to three MSAs owned by SBC, with whom the Company has a joint venture
in Illinois and Texas.

8
<PAGE> 10

THE OFFERING

<TABLE>
<S> <C>
Class A Common Stock Offered
by Selling Stockholders..... 3,600,000 shares
Class A Common Stock
Outstanding after this
Offering.................... 15,587,277 shares
Class B Common Stock
Outstanding after this
Offering.................... 15,204,390 shares
----------
Total Shares Outstanding...... 30,791,667 shares
==========
Voting Rights................. Holders of Class A Common Stock are entitled to one vote per
share and holders of Class B Common Stock are entitled to 10
votes per share. Holders of the Company's outstanding shares
of Series A Cumulative Convertible Preferred Stock are
entitled to the number of votes equal to the number of shares
of Class A Common Stock the holder would receive upon
conversion. Except as otherwise required by law, the Class A
Common Stock, Class B Common Stock and Series A Cumulative
Convertible Preferred Stock will vote together on all matters
submitted to a vote of stockholders, including the election
of directors. Immediately following the closing of this
Offering, the outstanding shares of Class A Common Stock will
represent approximately 8.9% ( % if the Underwriters'
over-allotment option is exercised in full) of the combined
voting power of the outstanding capital stock. See "Principal
and Selling Stockholders" and "Description of Capital Stock".
The Class A Common Stock and the Class B Common Stock are
collectively referred to herein as "Common Stock". After the
sale of the shares of Class A Common Stock offered hereby,
certain of the Company's existing stockholders that are
parties to a stockholders agreement will, if considered
together, own shares of Common Stock and Series A Cumulative
Convertible Preferred Stock representing approximately 74.8%
( % if the Underwriters' over-allotment option is exercised
in full) of the voting power entitled to vote in matters
affecting stockholders generally and thereby will continue to
be able to control the election of the Company's Board and
generally will be able to direct the affairs of the Company
if they act together.
Cash Dividends on Common
Stock....................... Holders of Class A Common Stock, Class B Common Stock and
Series A Cumulative Convertible Preferred Stock will be
entitled to share ratably (based on the number of shares of
Class A Common Stock the holder would receive upon conversion
in the case of the Series A Cumulative Convertible Preferred
Stock), as a single class, in any dividends declared by the
Company on the Common Stock. The Company does not anticipate
paying dividends on its Common Stock in the foreseeable
future. See "Risk Factors", "Price Range of Class A Common
Stock and Dividend Policy" and "Description of Capital
Stock".
Conversion of Class B Common
Stock....................... Each share of Class B Common Stock is convertible into Class
A Common Stock on a one-for-one basis at any time at the
option of the holder thereof and under certain other
circumstances. See "Description of Capital Stock".
</TABLE>

9
<PAGE> 11
<TABLE>
<S> <C>
American Stock Exchange
Symbol...................... "PC" (the Class A Common Stock also trades on the Chicago
Stock Exchange under the symbol "PC.M" and the Pacific Stock
Exchange under the symbol "PC.P").
</TABLE>

Unless otherwise indicated, the information in this Prospectus (i) reflects
the 65-for-1 split of the Class B Common Stock effective September 1994, and the
5-for-4 splits of the Class A Common Stock and Class B Common Stock effective
August 1995 and March 1996, (ii) assumes no conversion of the Company's
outstanding shares of Series A Cumulative Convertible Preferred Stock which are
convertible as of March 31, 1996 into between 7,675,000 and 11,296,173 shares of
Class A Common Stock, (iii) assumes no conversion of the Company's outstanding
10 3/4% Senior Subordinated Convertible Discount Notes due 2004 which are
convertible as of March 31, 1996 into between 3,058,384 and 3,924,996 shares of
Class A Common Stock, (iv) assumes no exercise of outstanding warrants to
purchase 1,500,688 shares of Class B Common Stock, (v) assumes no exercise of
outstanding employee stock options granted under the Company's 1994 Stock Option
Plan to purchase 1,389,063 shares of Class A Common Stock and (vi) assumes no
exercise of the Underwriters' over-allotment option.

10
<PAGE> 12

SUMMARY HISTORICAL AND UNAUDITED PRO FORMA
FINANCIAL AND OPERATING DATA

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

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

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

<TABLE>
<CAPTION>
THREE MONTHS ENDED YEARS ENDED DECEMBER 31,
MARCH 31, 1996 ---------------------------------
--------------------------- PRO
PRO FORMA ACTUAL ACTUAL
FORMA(A) ACTUAL 1995(A) 1995 1994
-------- -------------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues....................... $ 22,781 $ 21,262 $ 71,870 $41,504 $ 5,209
Cost of services and sales..... 7,676 7,747 22,921 15,645 2,706
Selling, general and
administrative.............. 8,705 7,384 31,556 16,512 6,005
Depreciation and
amortization................ 5,244 4,557 20,050 10,337 2,720
-------- -------- -------- -------- --------
Operating income (loss)..... 1,156 1,574 (2,657) (990) (6,222)
Other income (expense)......... (10,066)(b) (8,522) (37,134)(b) (6,721) 4,782
-------- -------- -------- -------- --------
Net income (loss)........... $ (8,910) $ (6,948) $(39,791) $(7,711) $(1,440)
======== ======== ======== ======== ========
Net income (loss) per
share(c).................. $ (0.29) $ (0.23) $ (1.43) $ (0.30) $ (0.08)
======== ======== ======== ======== ========
CERTAIN OPERATING DATA:
EBITDA(d)...................... $ 6,966 $ 6,381 $ 19,686 $ 9,867 $(3,599)
Ending subscribers(e).......... 100,287 95,387 87,059 78,227 17,344
Ending penetration(f).......... 2.6% 2.6% 2.2% 2.2% 1.0%
Average marketing costs per net
subscriber addition(g)...... $ 416 $ 369 $ 495 $ 403 $ n/a
Average monthly revenue per
subscriber(h)............... $ 76 $ 79 $ 85 $ 107 $ n/a
Churn(i)....................... 1.8% 1.6% 2.1% 2.3% n/a
</TABLE>

11
<PAGE> 13

<TABLE>
<CAPTION>
AS OF MARCH 31, 1996
------------------------
PRO FORMA(J) ACTUAL
------------ --------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital...................................................... $ 47,453 $ 89,858
Net fixed assets..................................................... 58,381 56,886
Total assets......................................................... 563,759 545,647
Long-term debt....................................................... 342,232 324,845
Total liabilities.................................................... 365,486 347,520
Stockholders' equity................................................. 198,273 198,127
</TABLE>

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

(b) Includes $1,000 and $250 for the year ended December 31, 1995, and the three
months ended March 31, 1996, respectively, included in other income
(expense) attributed to the covenant not to compete paid to the Company
pursuant to the Lubbock/ Minnesota Exchange. The covenant not to compete is
applicable to the three years following the exchange (1995, 1996 and 1997).
In addition, $1,250 and $313 for the year ended December 31, 1995 and the
three months ended March 31, 1996, respectively, are included in other
income (expense) attributed to the covenant not to compete to be paid to the
Company pursuant to the sale of the AL-4 RSA.

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

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

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

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

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

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

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

(j) Pro forma to reflect each of the transactions described in "Unaudited Pro
Forma Condensed Consolidated Financial Statements" and which occurred after
March 31, 1996 or is pending as if each such transaction occurred as of
March 31, 1996. See "Unaudited Pro Forma Condensed Consolidated Financial
Statements".

12
<PAGE> 14

RISK FACTORS

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

LIMITED OPERATING HISTORY; NET LOSSES

Since its formation, the Company has concentrated on the acquisition,
exchange, construction, initial operation and development of cellular telephone
systems. Although the Company has operated cellular telephone systems since
1989, it has acquired all of its existing Systems between April 1994 and April
1996. On a pro forma basis, after giving effect to the Recent Acquisitions, the
Pending Transactions and the other transactions described herein under
"Unaudited Pro Forma Condensed Consolidated Financial Data", the Company would
have incurred an accounting net loss of $39.8 million and $8.9 million for the
year ended December 31, 1995 and the three months ended March 31, 1996,
respectively. There can be no assurance that the Company's future operations,
individually or in the aggregate, will generate sufficient earnings to pay its
obligations. See "Selected Financial Data" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations".

LEVERAGE AND ABILITY TO MEET REQUIRED DEBT SERVICE

The Company considers itself highly leveraged. On a pro forma basis, after
giving effect to the Recent Acquisitions, the Pending Transactions and the other
transactions described herein under "Unaudited Pro Forma Condensed Consolidated
Financial Statements", for the year ended December 31, 1995 and the three months
ended March 31, 1996, the Company's ratio of EBITDA to total interest expense
would have been 87% and 71%, respectively, and the Company's deficiency of
earnings to fixed charges would have been $39.8 million and $8.9 million,
respectively. The Company considers that its high degree of leverage could
significantly limit its ability to make acquisitions, withstand competitive
pressures or adverse economic conditions, obtain necessary financing or take
advantage of business opportunities that may arise.

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

BUSINESS RISKS ASSOCIATED WITH PENDING TRANSACTIONS

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

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

The Company will also be subject to risks that new Systems, including all
of its existing Systems which were acquired since 1994, and the Systems to be
acquired pursuant to the Pending Transactions, will not perform as expected and
that the returns from such Systems will not support

13
<PAGE> 15

the indebtedness incurred to acquire, or the capital expenditures needed to
develop, such Systems. See "The Company -- Pending Transactions".

COMPETITION

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

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

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

CONTROL BY EXISTING STOCKHOLDERS

As of the date of this Prospectus, certain stockholders of the Company that
are party to the stockholders agreement described below, if considered together,
own shares of Common Stock and Series A Cumulative Convertible Preferred Stock
representing approximately 74.8% of the voting power entitled to vote in matters
affecting stockholders generally and thereby will be able to control the
election of the board of directors and generally able to direct the affairs of
the Company if they act together. These stockholders have entered into an
agreement (the "Stockholders Agreement") providing for the designation by
certain existing stockholders of directors to be elected to the board of
directors. The Stockholders Agreement will have the effect of determining the
composition of the board of directors for the term of the agreement. Pursuant to
the Stockholders Agreement, Mr. Robert Price has the right to designate the
majority of the members of the board of directors. See "Principal and Selling
Stockholders".

DEPENDENCE ON CORPORATE MANAGEMENT

The Company's decentralized management philosophy delegates day-to-day
operating decisions to the local System managers and, therefore, the Company's
affairs are managed by a small

14
<PAGE> 16

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

RELIANCE ON USE OF THIRD-PARTY SERVICE MARK

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

LIMITS ON THE COMPANY'S BUSINESS

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

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

POTENTIAL FOR ADVERSE REGULATORY CHANGE AND NEED FOR REGULATORY APPROVALS

The licensing, construction, operation, acquisition and sale of cellular
systems, as well as the number of cellular and other wireless licensees
permitted in each market, are regulated by the FCC. Changes in the regulation of
cellular activities (such as a decision by the FCC to permit more than two
licensees in each cellular market) and other wireless carriers could have a
material adverse

15
<PAGE> 17

effect on the Company's operations. In addition, all cellular licenses in the
United States were granted for an initial 10-year term and are subject to
renewal. The Company's cellular licenses expire in various years from 1997 to
2001. While the Company believes that each of these licenses will be renewed
based upon FCC rules establishing a presumption in favor of licensees that have
complied with their regulatory obligations during the initial license period,
there can be no assurance that all of the Company's licenses will be renewed.

FLUCTUATIONS IN MARKET VALUE OF LICENSES

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

EQUIPMENT FAILURE; NATURAL DISASTER

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

RADIO FREQUENCY EMISSION CONCERNS

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

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

Sales of the Company's Common Stock in the public market could adversely
affect the market price of the Class A Common Stock. The Company has, and after
giving effect to this Offering will have, 30,791,667 shares of Common Stock
outstanding. After giving effect to the Offering, 13,747,866 shares of Class A
Common Stock will be freely tradeable without restriction (except as to
affiliates of the Company) and the remaining 1,839,411 shares of Class A Common
Stock and all 15,204,390 outstanding shares of Class B Common Stock will be
"restricted securities" as defined in Rule 144 under the Securities Act ("Rule
144"). After giving effect to this Offering, the holders of 10,104,355 of the
outstanding shares of Common Stock, the holders of the Series A Cumulative
Convertible Preferred Stock (which shares are convertible into 8,262,240 shares
of Common Stock (subject to adjustment)) and the holders of the 10 3/4% Senior
Subordinated Convertible Discount Notes (which notes are convertible into
between 3,058,384 and 3,924,996 shares of Common Stock) are entitled to certain
rights with respect to the registration of such shares, or the shares issuable
upon conversion of any such convertible securities, for offer and sale to the
public. In addition, the Company intends to register up to 2,109,375 shares of
Class A Common Stock reserved for issuance under its 1994 Stock Option Plan. See
"Shares Eligible for Future Sale".

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<PAGE> 18

THE COMPANY

PriCellular, through its subsidiaries, owns and operates FCC licensed
cellular telephone systems in the United States, primarily in smaller MSAs and
strategically located RSAs. The Company operates its Systems principally in the
Midwest and Mid-Atlantic regions in addition to markets north of New York City
and south of Albany, NY. As of April 30, 1996, the Company owned cellular
interests representing approximately 4.0 million Net Pops and had over 100,000
subscribers before giving effect to the Pending Transactions. The Company sells
and markets its products and services principally under the CELLULAR ONE(R)
brand name through a distribution network of over 50 full service retail stores,
a direct sales force and a select group of agents. In addition, the Company has
formed a strategic alliance with McCaw/AT&T Wireless, a principal stockholder,
allowing it to take advantage of McCaw/AT&T Wireless' acquisition experience,
vendor discounts, centralized "back office" functions and joint marketing
opportunities in markets which are adjacent to McCaw/AT&T Wireless markets.

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

RECENT ACQUISITIONS

During 1995 and through April 1996, the Company made or agreed to make
several strategic acquisitions which expanded its Upper Midwest Cluster and
established the Mid-Atlantic Cluster and the New York Cluster.

17
<PAGE> 19

The Mid-Atlantic Cluster Acquisitions

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

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

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

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

Expansion of Upper Midwest Cluster

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

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

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

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

The New York Cluster Acquisition

On December 29, 1995, the Company acquired from Cellular of Upstate New
York Inc. substantially all of the assets of the System serving the NY-5 RSA
(383,960 Net Pops) for

18
<PAGE> 20

approximately $65.9 million in cash. The foregoing transaction is referred to
here as the "NY-5 Acquisition".

On April 23, 1996, the Company acquired from subsidiaries of USCC the
System serving the NY-6 RSA (111,023 Net Pops) and 83% of the System serving the
Poughkeepsie, NY MSA (262,663 Pops). The Company acquired substantially all of
the assets serving the NY-6 RSA for approximately $19.8 million in cash and 83%
of the stock of the Dutchess County Cellular Telephone Company serving the
Poughkeepsie, NY MSA for approximately $38.6 million, with one half paid in cash
and the balance in a three-year note bearing interest at the prime rate (the
"Poughkeepsie Note").

PENDING TRANSACTIONS

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

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

Expansion of the Mid-Atlantic Cluster -- The WV-3 Acquisition

The AL-4 Disposition

The Company has reached agreement with Mercury, Inc. to sell, subject to
certain conditions including FCC approval, its recently-acquired AL-4 RSA
(140,200 Pops) for $27.5 million (of which

19
<PAGE> 21

$2.5 million is allocated to a two year covenant not to compete) or
approximately $200 per Pop. The Company acquired this stand-alone RSA in
November 1995 from Dominion Cellular, Inc. for $10 million in cash and $10
million in a 5-year, 4% Note that was subsequently converted into 1,468,860
shares of Class A Common Stock of PriCellular. There can be no assurance that
the AL-4 Disposition will be consummated.

The MI-2 Disposition

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

The WI-2 Acquisition

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

Remaining Shares of CIS

The Company currently intends to acquire all of the outstanding shares of
capital stock of CIS not currently owned by the Company, although the Company is
not required to do so. Such acquisitions may be effected through privately
negotiated or open market purchases, subsequent tender offers, a merger or
similar business combination between the Company and CIS or otherwise. As of
March 31, 1996, there were outstanding approximately 841,000 shares of CIS
capital stock not owned by the Company, representing approximately 9.2% of the
fully diluted equity of CIS.

OWNERSHIP PROFILE

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

RELATIONSHIP WITH MCCAW/AT&T WIRELESS

20
<PAGE> 22

Wireless contributed a Northern Telecom digital supernode switch and
approximately 100 cell sites to the Company. The Company believes that the
proximity of each of its operating clusters to McCaw/AT&T Wireless' Systems
affords significant opportunities for joint marketing, promotions and other
programs. The Company's Upper Midwest Cluster is contiguous to McCaw/AT&T
Wireless' Systems serving the Minneapolis/St. Paul, MN MSA and the St. Cloud, MN
MSA. The Company's Mid-Atlantic Cluster borders the Pittsburgh, PA,
Steubenville, OH MSA and Wheeling, WV MSAs owned by McCaw/AT&T Wireless. The
Company's New York Cluster abuts the northern border of McCaw/AT&T Wireless' New
York City MSA, including Westchester and Rockland Counties. The New York Cluster
is also adjacent to three MSAs owned by SBC (with whom the Company has a joint
venture in Illinois and Texas).

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

21
<PAGE> 23

USE OF PROCEEDS

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

PRICE RANGE OF CLASS A COMMON STOCK
AND DIVIDEND POLICY

PRICE RANGE OF CLASS A COMMON STOCK

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

<TABLE>
<CAPTION>
PERIOD HIGH LOW
------ ------
<S> <C> <C>
1994:
Fourth quarter (since initial public offering on
December 15, 1994).................................. $ 6.24 $ 5.76
1995:
First quarter......................................... $ 6.32 $ 4.16
Second quarter........................................ $ 6.08 $ 4.56
Third quarter......................................... $11.20 $ 5.80
Fourth quarter........................................ $11.90 $ 9.20
1996:
First quarter......................................... $13.38 $ 9.00
Second quarter (through June 6, 1996)................. $14.50 $12.50
</TABLE>

A recent last sale price for the Class A Common Stock on the American Stock
Exchange is set forth on the cover page of this Prospectus. On April 22, 1996,
there were 64 holders of record of the Class A Common Stock. The Company
estimates that there were approximately 3,000 holders of Class A Common Stock
based upon the number of holders of record and the number of individual
participants in certain security position listings.

There is no established public trading market for the Company's Class B
Common Stock. On April 22, 1996, there were 19 holders of record of the Class B
Common Stock.

DIVIDEND POLICY

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

22
<PAGE> 24

CAPITALIZATION

The following table sets forth as of March 31, 1996 (i) the consolidated
capitalization of the Company and (ii) the unaudited pro forma consolidated
capitalization of the Company as adjusted for the Pending Transactions and the
Offering. This table should be read in conjunction with the consolidated
financial statements of the Company, including the notes thereto, the "Unaudited
Pro Forma Condensed Consolidated Financial Statements" and notes thereto,
included elsewhere herein, "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "The Company -- Recent Acquisitions"
and " -- Pending Transactions".

<TABLE>
<CAPTION>
AS OF MARCH 31, 1996
---------------------------
PRO FORMA
ACTUAL AS ADJUSTED
--------- -----------
<S> <C> <C>
(IN THOUSANDS)
Current portion of long-term debt................................. $ 389 $ --
14% Senior Subordinated Discount Notes............................ 132,556 132,556
10 3/4% Senior Subordinated Convertible Discount Notes............ 37,946 37,946
12 1/4% Senior Subordinated Discount Notes........................ 152,301 152,301
Poughkeepsie Note................................................. -- 19,429
Other long-term debt.............................................. 2,042 --
-------- --------
Total long-term debt (including current portion of
long-term debt)...................................... 325,234 342,232
-------- --------
Stockholders' equity:
Preferred Stock, $0.01 par value per share: Authorized
10,000,000 shares; issued and outstanding 96,000 shares
Series A Cumulative Convertible.............................. 1 1
Common Stock, $0.01 par value per share:
Class A: Authorized 100,000,000 shares; issued and
outstanding 13,522,046 shares actual; 15,587,277 as
adjusted.................................................... 135 156
Class B: Authorized 20,000,000 shares; issued and outstanding
17,269,621 shares actual; 15,204,390 as adjusted............ 173 152
Additional paid-in capital........................................ 214,966 214,966
Retained earnings................................................. (17,148) (17,002)
-------- --------
Total stockholders' equity.............................. 198,127 198,273
-------- --------
Total capitalization.................................... $ 523,361 $ 540,505
======== ========
</TABLE>

23
<PAGE> 25

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The pro forma financial statements presented below reflect the effects of
adjustments to the historical consolidated financial statements of the Company
necessary to give pro forma effect to the transactions described as if such
transactions had occurred on January 1, 1995 for purposes of the unaudited pro
forma condensed consolidated statements of operations and as of March 31, 1996
for purposes of the unaudited pro forma condensed consolidated balance sheet.

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

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

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

24
<PAGE> 26

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

25
<PAGE> 27

PRICELLULAR CORPORATION

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL
-------------------
PRO FORMA PRO FORMA
ADJUSTMENTS FOR RECENT PENDING
HISTORICAL FOR RECENT ACQUISITIONS ACQUISITIONS
----------------------------- ACQUISITIONS AND THE DEBT -------------------
RECENT AND THE FINANCINGS ORANGE
PRICELLULAR ACQUISITIONS(1) DEBT FINANCINGS AS ADJUSTED COUNTY WV-3
----------- --------------- --------------- ------------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
REVENUES........................... $ 21,262 $ 2,671 $ (318)(f)(g) $ 23,615 $ 2,438 $ 1,114
COSTS AND EXPENSES:
Cost of cellular service.......... 5,435 983 (118)(g) 6,300 366 126
Cost of equipment sold............ 2,312 252 (53)(g) 2,511 67 72
Selling, general and
administrative.................. 7,384 1,217 (163)(g) 8,438 1,261 560
Depreciation and amortization..... 4,557 213 354(b)(g) 5,124 258 313
---- ---- ------ ------ ----- ------
19,688 2,665 20 22,373 1,952 1,071
---- ---- ------ ------ ----- ------
Operating income (loss)............ 1,574 6 (338) 1,242 486 43
Other income (expense)
Interest expense, net............. (8,772) (340) (1,425)(c)(g)(h) (10,537) (916) (414)
Other income (expense)............ 250 3 253
---- ---- ------ ------ ----- ------
Total other income (expense)....... (8,522) (337) (1,425) (10,284) (916) (414)
---- ---- ------ ------ ----- ------
Net income (loss).................. $ (6,948) $ (331) $ (1,763) $ (9,042) $ (430) $ (371)
==== ==== ====== ====== ===== ======
Net income (loss) per share........ $ (0.23) $ (0.29)
-------- ---------
-------- ---------
Weighted average number of Common
Shares used in computation of net
income (loss) per share........... 30,801,000 30,801,000
-------- ---------
-------- ---------

PRO FORMA
ADJUSTMENTS
FOR PENDING
TRANSACTIONS PRO FORMA
------------ -----------
<S> <C<C> <C>
REVENUES........................... $ (4,386)(l) $ 22,781
COSTS AND EXPENSES:
Cost of cellular service.......... (1,123)(l) 5,669
Cost of equipment sold............ (643)(l) 2,007
Selling, general and
administrative.................. (1,554)(l) 8,705
Depreciation and amortization..... (451)(k)(l) 5,244
------ ------
(3,771) 21,625
------ ------
Operating income (loss)............ (615) 1,156
Other income (expense)
Interest expense, net............. 1,235(j)(n) (10,632)
Other income (expense)............ 313(m) 566
------ ------
Total other income (expense)....... 1,548 (10,066)
------ ------
Net income (loss).................. $ 933 $ (8,910)
====== ======
Net income (loss) per share........ $ (0.29)
--------
--------
Weighted average number of Common
Shares used in computation of net
income (loss) per share........... 30,801,000
--------
--------
</TABLE>

- ---------------
(1) See supplemental unaudited condensed combined statement of operations for
the three months ended March 31, 1996 on page 35 for details of Recent
Acquisitions.

26
<PAGE> 28

PRICELLULAR CORPORATION

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL
-------------------
PRO FORMA PRO FORMA
ADJUSTMENTS FOR RECENT PENDING
HISTORICAL FOR RECENT ACQUISITIONS ACQUISITIONS
----------------------------- ACQUISITIONS AND THE DEBT -------------------
RECENT AND THE FINANCINGS ORANGE
PRICELLULAR ACQUISITIONS(1) DEBT FINANCINGS AS ADJUSTED COUNTY WV-3
----------- --------------- --------------- ------------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
REVENUES.......................... $ 41,504 $26,898 $ (5,439)(a)(f)(g) $ 62,963 $ 9,145 $ 4,237
COSTS AND EXPENSES:
Cost of cellular service......... 10,694 6,141 (1,892)(a)(g) 14,943 1,310 599
Cost of equipment sold........... 4,951 1,811 (422)(a)(g) 6,340 572 514
Selling, general and
administrative................. 16,512 11,376 (1,360)(a)(g) 26,528 4,314 2,069
Depreciation and amortization.... 10,337 4,134 2,429(a)(b)(g) 16,900 1,233 1,172
-------- ------- -------- -------- ------- -------
42,494 23,462 (1,245) 64,711 7,429 4,354
-------- ------- -------- -------- ------- -------
Operating Income (loss)........... (990) 3,436 (4,194) (1,748) 1,716 (117)
Other income (expense)
Interest expense, net............ (18,839) (2,439) (17,770)(c)(g)(h) (39,048) (4,073) (1,598)
Other income (expense)........... 520 23 500(d) 1,043
Gain on sale of investments in
cellular operations............ 11,598 (11,598)(e)
-------- ------- -------- -------- ------- -------
Total other income (expense)...... (6,721) (2,416) (28,868) (38,005) (4,073) (1,598)
-------- ------- -------- -------- ------- -------
Net income (loss)................. $ (7,711) $ 1,020 $ (33,062) $ (39,753) $(2,357) $(1,715)
======== ======= ======== ======== ======= =======
Net income (loss) per share....... $ (0.30) $ (1.43)
-------- ---------
-------- ---------
Weighted average number of Common
Shares used in computation of net
income (loss) per share(dd)...... 25,771,000 27,863,000
-------- ----------
-------- ----------

PRO FORMA
ADJUSTMENTS
FOR PENDING
TRANSACTIONS PRO FORMA
------------ -----------
<S> <C<C> <C>
REVENUES.......................... $ (4,475)(i)(l) $ 71,870
COSTS AND EXPENSES:
Cost of cellular service......... (923)(l) 15,929
Cost of equipment sold........... (434)(l) 6,992
Selling, general and
administrative................. (1,355)(l) 31,556
Depreciation and amortization.... 745(k)(l) 20,050
------- --------
(1,967) 74,527
------- --------
Operating Income (loss)........... (2,508) (2,657)
Other income (expense)
Interest expense, net............ 5,292(j)(n) (39,427)
Other income (expense)........... 1,250(m) 2,293
Gain on sale of investments in
cellular operations............
------- --------
Total other income (expense)...... 6,542 (37,134)
------- --------
Net income (loss)................. $ 4,034 $ (39,791)
======= ========
Net income (loss) per share....... $ (1.43)
--------
--------
Weighted average number of Common
Shares used in computation of net
income (loss) per share(dd)...... 27,863,000
--------
--------
</TABLE>

- ---------------
(1) See supplemental unaudited condensed combined statement of operations for
the year ended December 31, 1995 on page 36 for details of Recent
Acquisitions.

27
<PAGE> 29

PRICELLULAR CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
HISTORICAL
-----------------------------------------------------------------------
ORANGE
PRICELLULAR COUNTY NY-6 POUGHKEEPSIE WV-3
--------- --------- ------- ------------ --------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents......................... $ 94,873 $ 27 $ 341 $ 210 $ 76
Accounts receivable, net.......................... 9,674 801 645 742 506
Inventory......................................... 1,605 171 24 32 46
Prepaid expenses and other current assets......... 4,766 130 53 26 31
--------- --------- ------- ------------ --------
Total current assets.......................... 110,918 1,129 1,063 1,010 659
Net fixed assets................................... 56,886 5,398 1,698 2,217 2,272
Investment in cellular operations.................. 37,637 2,760
Cellular licenses, net............................. 308,140 1,623 12,875
Cellular license held for sale..................... 21,000
Deferred financing costs, net...................... 11,028
Other assets....................................... 38 13 42 84 656
--------- --------- ------- ------------ --------
Total assets.................................. $ 545,647 $ 9,300 $ 4,426 $ 3,311 $ 16,462
========== ========== ======= ============== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses............. $ 16,615 $ 273 $ 234 $ 435 $ 336
Long-term debt -- current portion................. 389 20
Income taxes payable.............................. 524 45 76
Other current liabilities......................... 3,532 33,234 172 13,817 15,695
--------- --------- ------- ------------ --------
Total current liabilities..................... 21,060 33,507 451 14,348 16,031
Long-term debt..................................... 324,845 37
Other long-term liabilities........................ 1,615 47 20 96
--------- --------- ------- ------------ --------
Total liabilities............................. 347,520 33,554 471 14,481 16,031
Stockholders' equity (deficit)..................... 198,127 (24,254) 3,955 (11,170) 431
--------- --------- ------- ------------ --------
Total liabilities and stockholders' equity
(deficit)......................................... $ 545,647 $ 9,300 $ 4,426 $ 3,311 $ 16,462
========== ========== ======= ============== =========

PRO FORMA
ADJUSTMENTS PRO FORMA
------------ ------------
<S> <C<C> <C>
ASSETS
Current assets:
Cash and cash equivalents......................... $ $(43,512)(o) $ 52,015
Accounts receivable, net.......................... (2,977)(p) 9,391
Inventory......................................... (342)(q) 1,536
Prepaid expenses and other current assets......... (136)(r) 4,870
------------ ------------
Total current assets.......................... (46,967) 67,812
Net fixed assets................................... (10,090)(s) 58,381
Investment in cellular operations.................. (2,760)(t) 37,637
Cellular licenses, net............................. 66,194(u) 388,832
Cellular license held for sale..................... (21,000)(v) 0
Deferred financing costs, net...................... 11,028
Other assets....................................... (764)(w) 69
------------ ------------
Total assets.................................. $ (15,387) $ 563,759
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses............. $ (3,223)(x) $ 14,670
Long-term debt -- current portion................. (409)(y) 0
Income taxes payable.............................. 645
Other current liabilities......................... (61,406)(z) 5,044
------------ ------------
Total current liabilities..................... (65,038) 20,359
Long-term debt..................................... 17,350(aa) 342,232
Other long-term liabilities........................ 1,117(bb) 2,895
------------ ------------
Total liabilities............................. (46,571) 365,486
Stockholders' equity (deficit)..................... 31,184(cc) 198,273
------------ ------------
Total liabilities and stockholders' equity
(deficit)......................................... $ (15,387) $ 563,759
============== ==============
</TABLE>

28
<PAGE> 30

NOTES TO UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)

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

<TABLE>
<CAPTION>
THREE MONTHS YEAR ENDED
ENDED DECEMBER 31,
MARCH 31, 1996 1995
-------------- ------------
<S> <C> <C> <C>
(a) Represents the results of operations of the Lubbock
system for the period January 1, 1995 to July 7,
1995 and the results of operations of the Laredo
System which was contributed to the SBC Joint
Venture on November 30, 1995.
Revenues........................................... $ (7,680)
Cost of Cellular service........................... (1,623)
Cost of equipment sold............................. (330)
Selling, general and administrative................ (1,104)
Depreciation and amortization...................... (1,432)
(b) Represents the incremental depreciation and
amortization due to the application of purchase
price accounting resulting from increases in the
basis of the assets that resulted from the
acquisition of Wausau, MI-1, MN-2A, MN-3B, MN-5,
Alton/Granite City, OH-7, WV-2, NY-5, PA-9, NY-6
and Poughkeepsie, NY. Fixed assets are depreciated
over a useful life of three to seven years.
Cellular licenses are amortized over 40 years...... $ 457 $ 3,995
(c) Represents amortization of the deferred financing
costs, as well as the adjustments to interest
expense to give effect to the issuance of the
10 3/4% Senior Subordinated Convertible Discount
Notes issued during 1995, the issuance of the
12 1/4% Senior Subordinated Discount Notes issued
during 1995, the issuance of the Poughkeepsie Note
issued in April 1996, and the elimination of
certain interest expense of Wausau, MI-1, MN-2A,
MN-3B, MN-5, Alton/ Granite City, OH-7, WV-2, NY-5,
PA-9 and NY-6 as a result of debt not assumed as a
part of these acquisitions.
Amortization of deferred financing costs......... $ (649)
Interest expense for the 10 3/4% Senior
Subordinated Convertible Discount Notes....... $ (409) (2,702)
Interest expense for the 12 1/4% Senior
Subordinated Discount Notes................... (615) (13,734)
Interest expense for the Poughkeepsie Note....... (364) (1,457)
Elimination of historical interest expense, net
as a result of debt not assumed as part of the
following acquisitions:
MN-2A, MN-3B, MN-5 and Alton/Granite City.......... 496
OH-7............................................... 326
WV-2............................................... 156
NY-5............................................... (154)
PA-9............................................... 305
NY-6............................................... 5 38
Poughkeepsie....................................... 334 1,272
-------------- ------------
$ (1,049) $ (16,103)
=============== =============
</TABLE>

29
<PAGE> 31

NOTES TO UNAUDITED PRO FORMA CONDENSED

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

<TABLE>
<CAPTION>
THREE MONTHS YEAR ENDED
ENDED DECEMBER 31,
MARCH 31, 1996 1995
-------------- ------------
<S> <C> <C> <C>
(d) Represents additional income attributable to the
covenant not to compete pursuant to the
Lubbock/Minnesota Exchange......................... $ 500
(e) Represents the elimination of the gain on the sale
of the Company's interest in the Abilene, TX MSA... $ (11,598)
(f) Represents the share of income from the SBC Joint
Venture in accordance with the Joint Venture
Agreement.......................................... $ 225 $ 3,025
(g) Represents the elimination of the results of
operations of the MI-2 system which is to be
disposed of.
Revenues......................................... $ (543) $ (784)
Cost of cellular service......................... (118) (269)
Cost of equipment sold........................... (53) (92)
Selling, general and administrative.............. (163) (256)
Depreciation and amortization.................... (103) (134)
Interest expense, net............................ 68 107
(h) Represents the loss of interest income attributable
to a decrease in cash on hand due to the purchase
of NY-6 and Poughkeepsie........................... $ (444) $ (1,774)
(i) Represents the elimination of revenues earned in
connection with the Management Agreement associated
with the purchase of AL-4.......................... $ (755)
(j) Represents the elimination of certain interest
expense of Orange County and WV-3 as a result of
debt not assumed as a part of these acquisitions.
Orange County...................................... $ 916 $ 4,073
WV-3............................................... 414 1,598
-------------- ------------
$ 1,330 $ 5,671
=============== =============
(k) Represents the incremental depreciation and
amortization due to the application of purchase
price accounting resulting from increases in the
basis of the assets that resulted from the
acquisition of Orange County and WV-3. Fixed assets
are depreciated over a useful life of three to
seven years. Cellular licenses are amortized over
40 years........................................... $ 394 $ 1,585
(l) Represents the elimination of the results of
operations of AL-4, OH-9, OH-10 and Parkersburg,
WV/Marietta, OH systems which are to be sold or
exchanged.
Revenues........................................... $ (4,386) $ (3,720)
Cost of cellular service........................... (1,123) (923)
Cost of equipment sold............................. (643) (434)
Selling, general and administrative................ (1,554) (1,355)
Depreciation and amortization...................... (845) (840)
</TABLE>

30
<PAGE> 32

NOTES TO UNAUDITED PRO FORMA CONDENSED

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

<TABLE>
<CAPTION>
THREE MONTHS YEAR ENDED
ENDED DECEMBER 31,
MARCH 31, 1996 1995
-------------- ------------
<S> <C> <C> <C>
(m) Represents additional income attributable to the
covenant not to compete pursuant to the sale
of AL-4 ........................................... $ 313 $ 1,250
(n) Represents loss of interest income attributable to
a decrease in cash on hand due the purchase of
WV-3 .............................................. $ (95) $ (379)
</TABLE>

For purposes of determining the pro forma effect of the transactions
described above on the Company's unaudited Condensed Consolidated Balance Sheet
as of March 31, 1996, the following adjustments have been made:

<TABLE>
<S> <C> <C>
(o) CASH AND CASH EQUIVALENTS
Purchase of NY-6.......................................................... $(19,800)
Purchase of Poughkeepsie.................................................. (19,600)
Purchase of WV-3.......................................................... (35,000)
Proceeds from sale of AL-4................................................ 27,500
Proceeds from disposition of MI-2......................................... 6,031
Adjustments to the purchase price of NY-6, Poughkeepsie and WV-3 and the
sales price of AL-4 based upon their working capital, as adjusted, in
accordance with the acquisition and sales agreements.................... (2,199)
Total cash not acquired in connection with the above acquisitions......... (444)
---------
$(43,512)
=========
(p) ACCOUNTS RECEIVABLE
Receivables not acquired in connection with the above mentioned
acquisitions............................................................ $ (663)
Receivables sold or exchanged in the following transactions:
MI-2...................................................................... (402)
AL-4...................................................................... (349)
OH-9...................................................................... (954)
OH-10..................................................................... (265)
Parkersburg............................................................... (344)
--------
$ (2,977)
=========
(q) INVENTORY
Represents the elimination of inventory disposed of in the following
transactions:
MI-2...................................................................... $ (79)
AL-4...................................................................... (87)
OH-9...................................................................... (96)
OH-10..................................................................... (42)
Parkersburg............................................................... (38)
--------
$ (342)
=========
(r) PREPAID EXPENSES & OTHER CURRENT ASSETS
Represents the elimination of prepaid expenses and other current assets
disposed of in the following transactions:
MI-2...................................................................... $ (4)
</TABLE>

31
<PAGE> 33

NOTES TO UNAUDITED PRO FORMA CONDENSED

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

<TABLE>
<S> <C> <C>
AL-4...................................................................... (3)
OH-9...................................................................... (37)
OH-10..................................................................... (69)
Parkersburg............................................................... (7)
Represents the elimination of prepaid expenses and other current assets
not
acquired in the following acquisition:
Poughkeepsie.............................................................. (16)
--------
$ (136)
=========
(s) NET FIXED ASSETS
Represents the decrease in net fixed assets due to the sale and
disposition of the following:
MI-2...................................................................... $ (1,539)
AL-4...................................................................... (3,868)
OH-9...................................................................... (1,863)
OH-10..................................................................... (1,672)
Parkersburg............................................................... (1,148)
--------
$(10,090)
=========
(t) INVESTMENT IN CELLULAR OPERATIONS
Represents the elimination of Investments in Cellular Operations not being
acquired in connection with the Orange County Exchange.................. $ (2,760)
(u) CELLULAR LICENSES, NET
Represents the increase in Cellular licenses due to the application of
purchase price accounting for the following acquisitions:
NY-6...................................................................... $ 16,725
Poughkeepsie.............................................................. 38,559
WV-3...................................................................... 19,768
Represents the adjustment to cellular licenses resulting from the Orange
County Exchange......................................................... (2,094)
Represents the decrease in Cellular licenses due to disposition of the
MI-2 RSA................................................................ (6,764)
--------
$ 66,194
=========
(v) CELLULAR LICENSE HELD FOR SALE
Represents the decrease in Cellular license held for sale due to the sale
of the AL-4 RSA......................................................... $(21,000)
</TABLE>

32
<PAGE> 34

NOTES TO UNAUDITED PRO FORMA CONDENSED

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

<TABLE>
<S> <C> <C>
(w) OTHER ASSETS
Represents the elimination of other assets not acquired in the following
acquisitions:
NY-6...................................................................... $ (42)
Poughkeepsie.............................................................. (84)
WV-3...................................................................... (631)
Represents the decrease in other assets due to sale and disposition of the
following:
MI-2...................................................................... (4)
AL-4...................................................................... (2)
OH-9...................................................................... (1)
--------
$ (764)
=========
(x) ACCOUNTS PAYABLE & ACCRUED EXPENSES
Represents the decrease in accounts payable and accrued expenses due to
the sale and disposition of the following:
MI-2...................................................................... $ (321)
AL-4...................................................................... (522)
OH-9...................................................................... (1,001)
OH-10..................................................................... (738)
Parkersburg............................................................... (641)
--------
$ (3,223)
=========
(y) LONG-TERM DEBT -- CURRENT PORTION
Represents the decrease in Long-Term Debt -- Current Portion due to the
disposition of MI-2..................................................... $ (389)
Represents the elimination of Long-Term Debt -- Current Portion not being
acquired in the Poughkeepsie acquisition................................ (20)
--------
$ (409)
=========
(z) OTHER CURRENT LIABILITIES
Represents the elimination of affiliated payables not being acquired in
the following acquisitions:
NY-6...................................................................... $ (117)
Poughkeepsie.............................................................. (13,793)
WV-3...................................................................... (15,508)
Orange County............................................................. (33,234)
Represents the current unearned portion of the two year covenant not to
compete received in connection with the sale of AL-4.................... 1,250
Represents the decrease in other current liabilities due to the sale and
disposition of the following:
MI-2...................................................................... (1)
OH-9...................................................................... (2)
Parkersburg............................................................... (1)
--------
$(61,406)
=========
</TABLE>

33
<PAGE> 35

NOTES TO UNAUDITED PRO FORMA CONDENSED

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

<TABLE>
<S> <C> <C>
(aa) LONG-TERM DEBT
Represents the issuance of the Poughkeepsie Note in connection with the
purchase of Poughkeepsie................................................ $ 19,429
Represents the decrease in Long-Term Debt due to the disposition of
MI-2.................................................................... (2,042)
Represents the elimination of Long-Term Debt not being acquired in the
Poughkeepsie acquisition................................................ (37)
--------
$ 17,350
=========
(bb) OTHER LONG-TERM LIABILITIES
Represents the long-term unearned portion of the two year covenant not to
compete received in connection with the sale of AL-4.................... $ 1,250
Represents the decrease in other long-term liabilities due to the sale and
disposition of the following:
MI-2...................................................................... (8)
AL-4...................................................................... (16)
OH-9...................................................................... (26)
OH-10..................................................................... (10)
Parkersburg............................................................... (18)
Represents the elimination of other long-term liabilities not being
acquired in the Poughkeepsie acquisition................................ (55)
--------
$ 1,117
=========
(cc) STOCKHOLDERS' EQUITY
Represents the gain on sale of AL-4....................................... $ 146
Represents the elimination of net equity (deficit) in connection with the
following acquisitions:
NY-6...................................................................... (3,955)
Poughkeepsie.............................................................. 11,170
WV-3...................................................................... (431)
Orange County............................................................. 24,254
--------
$ 31,184
=========
(dd) WEIGHTED AVERAGE SHARES OUTSTANDING
The weighted average number of common shares used in computation of net income
(loss) per share for the year ended December 31, 1995 under the caption Pro Forma
for Recent Acquisitions As Adjusted and under the caption Pro Forma have been
computed using the weighted average shares outstanding for the period, adjusted to
reflect the issuance of common stock in connection with the AL-4 and Parkersburg,
WV/Marietta, OH MSA acquisitions as if such transactions occurred on January 1,
1995.
</TABLE>

34
<PAGE> 36

PRICELLULAR CORPORATION
SUPPLEMENTAL UNAUDITED CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR RECENT ACQUISITIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
HISTORICAL
------------------------------
RECENT ACQUISITIONS TOTAL
------------------------------ RECENT
PA-9 NY-6 POUGHKEEPSIE ACQUISITIONS
---- ---- ------------ ------------
<S> <C> <C> <C> <C>
Revenues......................................... $206 $942 $ 1,523 $ 2,671
Costs and expenses:
Cost of cellular service....................... 70 347 566 983
Cost of equipment sold......................... 15 84 153 252
Selling, general and administrative............ 62 363 792 1,217
Depreciation and amortization.................. 28 86 99 213
---- ---- ------------ ------------
175 880 1,610 2,665
---- ---- ------------ ------------
Operating income (loss).......................... 31 62 (87) 6
Other income (expense)
Interest expense, net.......................... (5) (335) (340)
Other income (expense)......................... 3 3
---- ---- ------------ ------------
Total other income (expense)..................... 0 (2) (335) (337)
---- ---- ------------ ------------
Net income (loss)................................ $ 31 $ 60 $ (422) $ (331)
===== ===== =========== ==========
</TABLE>

35
<PAGE> 37

PRICELLULAR CORPORATION
SUPPLEMENTAL UNAUDITED CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
FOR RECENT ACQUISITIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
HISTORICAL
------------------------------------------------------------------------------------------
RECENT ACQUISITIONS
------------------------------------------------------------------------------------------
MN-2A, MN-3B,
MN-5 AND ALTON
MI-1 WAUSAU GRANITE CITY, IL OH-7 WV-2 NY-5 PA-9
----- --------- ----------------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues............................... $ 558 $ 612 $ 1,224 $ 3,126 $ 688 $ 9,926 $ 1,789
Costs and expenses:
Cost of cellular service.............. 96 153 290 363 239 1,808 339
Cost of equipment sold................ 111 66 0 239 4 440 231
Selling, general and administrative... 132 150 776 1,294 325 4,140 847
Depreciation and amortization......... 129 105 690 282 145 1,572 296
---- ---- ------- ------ ----- ------ ------
468 474 1,756 2,178 713 7,960 1,713
---- ---- ------- ------ ----- ------ ------
Operating income (loss)................ 90 138 (532) 948 (25) 1,966 76
Other income (expense)
Interest expense, net................. (496) (326) (156) 154 (305)
Other income (expense)................ 6 4 11 6
---- ---- ------- ------ ----- ------ ------
Total other income (expense)........... 0 0 (496) (320) (152) 165 (299)
---- ---- ------- ------ ----- ------ ------
Net income (loss)...................... $ 90 $ 138 $ (1,028) $ 628 $ (177) $ 2,131 $ (223)
==== ==== ======= ====== ===== ====== ======

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

36
<PAGE> 38

SELECTED FINANCIAL DATA

(Dollars in thousands, except per share data)

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

<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31, YEARS ENDED DECEMBER 31,
------------------------ ------------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues...................... $ 21,262 $ 5,533 $ 41,504 $ 5,209 $ 3,809 $ 4,859 $ 2,274
Cost of cellular service....... 5,435 1,694 10,694 1,892 835 1,265 742
Cost of equipment sold......... 2,312 629 4,951 814 255 411 317
-------- -------- -------- ------- -------- ------ -------
Gross margin................... 13,515 3,210 25,859 2,503 2,719 3,183 1,215
General and administrative..... 3,533 1,378 9,048 4,854 1,280 3,272 1,744
Sales and marketing............ 3,851 701 7,464 1,151 379 517 545
Depreciation and
amortization................. 4,557 1,873 10,337 2,720 1,695 3,089 3,157
-------- -------- -------- ------- -------- ------ -------
Operating profit (loss)........ 1,574 (742) (990) (6,222) (635) (3,695) (4,231)
Gain on sale of investments in
cellular operations.......... 11,598 11,598 6,819 11,986 2,557
Interest expense, net.......... (8,772) (3,081) (18,839) (1,940) (470) (572) (97)
Other income (expense), net.... 250 520 (97) (240) (855) (586)
Net income (loss).............. $ (6,948) $ 6,625 $ (7,711) $ (1,440) $ 10,616 $ (2,565) $ (4,914)
======== ======== ======== ======= ======== ====== =======
Net income (loss) per share.... $ (.23) $ .27 $ (.30) $ (.08) $ .56 $ (.14) $ (.26)
======== ======== ======== ======= ======== ====== =======
Shares outstanding(1).......... 30,801,000 24,856,000 25,771,000 18,419,000 18,980,000 18,980,000 18,980,000
======== ======== ======== ======= ======== ====== =======
</TABLE>

<TABLE>
<CAPTION>
AS OF AS OF DECEMBER 31,
MARCH 31, ------------------------------------------------------------------
1996 1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital (deficit)................... $ 89,858 $116,415 $ 26,488 $ (139) $ 3,277 $ 3,311
Net fixed assets............................ 56,886 52,041 26,144 389 1,700 1,556
Total assets................................ 545,647 544,766 215,744 6,755 19,719 20,698
Long-term debt.............................. 324,845 315,216 113,683 4,000 6,410 6,793
Total liabilities........................... 347,520 339,038 137,508 4,680 10,144 8,558
Stockholders' equity........................ 198,127 205,728 78,236 2,075 9,575 12,140
</TABLE>

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

37
<PAGE> 39

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

GENERAL

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

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

HISTORICAL RESULTS OF OPERATIONS

Three Months Ended March 31, 1996 Compared to the Three Months Ended March 31,
1995

For the three months ended March 31, 1996 the Company posted strong
operating results. Operating cash flow after sales and marketing expenses
(EBITDA) totaled $6,381,000. Budgeted new subscribers for the first quarter of
1996 for the then owned systems were approximately 7,500 and included estimates
for the addition of PA-9 RSA (which connects the Company's Ohio/West Virginia
Cluster to McCaw/AT&T's Pittsburgh, PA MSA) and NY-5 RSA. These budgeted figures
were exceeded by 7,466 for a total of 14,946 net new subscriber additions, or a
99% gain over budget and there was no diminution in EBITDA. The important
acquisitions of NY-6 RSA and the Poughkeepsie, NY MSA which abut NY-5 closed on
April 23, 1996 and, accordingly, were not budgeted for the first quarter nor are
they included here, but their operations and results will be included in this
Company's second quarter results.

Overall, the Company and the Board are pleased with the speed in which the
Company has been able to bring on-line the operations of its newly acquired
properties and the fact that at the end of the quarter the Company had over
95,000 subscribers.

The Company acquired systems in March, July, September, November and
December of 1995 and February 1996. The results of operations for the three
months ended March 31, 1996 are not comparable with the same period in 1995.
Comparison of operating results for such period is neither meaningful nor
indicative of the Company's results of operations or growth.

Revenues for the three months ended March 31, 1996 increased to $21,262,000
(consisting of cellular service revenues of $19,512,000, equipment sales
revenues of $752,000 and other revenues of $998,000) from $5,533,000 (consisting
of cellular service revenues of $5,346,000 and equipment sales revenues of
$187,000) for the three months ended March 31, 1995.

Total operating expenses for the three months ended March 31, 1996
increased to $19,688,000 (consisting of cost of cellular service of $5,435,000,
cost of equipment sold of $2,312,000, general and administrative expenses of
$3,533,000, sales and marketing expenses of $3,851,000 and depreciation and
amortization of $4,557,000) from $6,275,000 of operating expenses for the three
months ended March 31, 1995 (consisting of cost of cellular service of
$1,694,000, cost of

38
<PAGE> 40

equipment sold of $629,000, general and administrative expenses of $1,378,000
sales and marketing expenses of $701,000 and depreciation and amortization of
$1,873,000).

The primary factor contributing to the increase in revenues and operating
expenses was the Company's acquisition of a significant portion of its existing
systems in the third quarter of 1995, results of which, are therefore reflected
in the results of operations for the current quarter but not in the first
quarter of 1995.

Net interest expense increased to $8,772,000 from $3,081,000, due primarily
to the Company's issuance of $205,000,000 face amount of Senior Subordinated
Discount Notes at 12 1/4% in September 1995 and $60,000,000 face amount of
Senior Subordinated Convertible Discount Notes at 10 3/4% in August 1995.

Other income for the current quarter consists of $250,000 resulting from
the Company's agreement not to compete with Western Wireless within the Lubbock,
TX MSA. The consideration for the noncompete agreement totals $3,000,000 and
covers a period of three years. Other income (expense) for the first quarter of
1995 includes a gain on the sale of cellular properties of $11,598,000 resulting
from the sale of the Abilene, TX MSA.

The provision for income taxes for the first quarter of 1995 is
attributable to the gain on the sale of investment in cellular operations
mentioned above.

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

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

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

Gain on sale of investments in cellular operations in 1995 and 1994 of
$11,598,000 and $6,819,000, respectively, were due to the disposition of the
Company's interest in the non-wireline

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system serving the Abilene, TX MSA and the sale of the Company's remaining
interest in the Wichita Falls System, respectively.

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

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

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

Total costs and expenses incurred in the year ended December 31, 1994 of
$11,431,000 increased from $4,444,000. The majority of the 1994 total costs and
expenses related to the newly acquired Systems while the total costs and
expenses in 1993 related to the Systems sold as mentioned above. Costs of
cellular service increased to $1,892,000 in 1994 from $835,000 in 1993 due to
the larger number of newly acquired markets in operation incurring system
telephone expenses and rental expenses on leased facilities. Cost of equipment
sold increased to $814,000 in 1994 from $255,000 in 1993 due to an increased
number of phones being sold in 1994. General and administrative expenses
increased to $4,854,000 from $1,280,000 primarily due to costs associated with
operating new markets and opening numerous administrative and retail offices in
1994. Sales and marketing expenses increased in 1994 to $1,151,000 from $379,000
in 1993 due to aggressive marketing kickoff campaigns for certain newly acquired
Systems. Depreciation and amortization increased to $2,720,000 in 1994 from
$1,695,000 in 1993 due to the larger amount of equipment and intangibles
(acquired in 1994) than were owned in 1993.

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

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

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

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LIQUIDITY AND CAPITAL RESOURCES

The cellular telephone business requires substantial capital to acquire,
construct and expand cellular telephone systems and to fund operating
requirements. The Company historically has financed its acquisitions and other
capital needs through the proceeds from the issuance of debt securities, the
sale of equity interests, borrowings and vendor credit facilities. As of March
31, 1996, the Company had $94,873,000 of cash and cash equivalents and
$89,858,000 of working capital.

During December 1994, the Company consummated an initial public offering of
6,250,000 shares of Class A Common Stock for net proceeds of $34,700,000. During
January 1995, the Company sold an additional 468,750 shares of Class A Common
Stock in connection with the over-allotment option granted to the underwriters
in the initial public offering resulting in an additional proceeds of
$2,600,000.

During January 1995, the Company consummated the sale of the non-wireline
cellular system serving the Abilene, Texas MSA for $15.9 million and during
March 1995, the Company consummated the sale of a portion of the MN-6 RSA for
$3.55 million.

During March 1995, the Company consummated the acquisitions of the MI-1 RSA
for $17.7 million and an additional 50.6% of the Wausau, WI MSA for $5.4
million. These acquisitions were funded with the proceeds from the sale of the
Abilene System mentioned above and the existing cash on hand of the Company.

On July 14, 1995, Harvard Private Capital Group, Inc. and Spectrum Equity
Investors, L.P. exercised an option to purchase a total of 1,034,769 shares of
the Company's Class A Common Stock resulting in net proceeds of $5,000,000 to
the Company.

On August 21, 1995, the Company received net proceeds of approximately
$34.2 million after expenses from the issuance of $60,000,000 aggregate
principal amount of 10 3/4% Senior Subordinated Convertible Discount Notes due
2004. The original issue discount on the 10 3/4% Notes accretes at the rate of
10 3/4% per annum until August 2000. Thereafter cash interest accrues at the
rate of 10 3/4% per annum. The 10 3/4% Notes are convertible into the Company's
Class A Common Stock at a conversion price of $12.42 per share. The Company can
force conversion of the 10 3/4% Notes under certain circumstances if the
Company's Class A Common Stock closes at $16.15 per share for ten out of fifteen
consecutive trading days.

On September 27, 1995, the Company received net proceeds of approximately
$138.3 million after expenses from the issuance of the 12 1/4% Senior
Subordinated Discount Notes. These proceeds and available cash of the Company
were used to finance the OH-7 RSA, OH-9 RSA, OH-10 RSA, Parkersburg,
WV/Marietta, OH MSA, WV-2 RSA, AL-4 RSA and NY-5 RSA acquisitions. The total
cost of these acquisitions was approximately $238 million, of which
approximately $168 million was paid in cash. In addition, on November 7, 1995,
the Company issued 1,468,860 shares of its Class A Common Stock in connection
with the AL-4 RSA acquisition and, on September 27, 1995, the Company issued an
$8.8 million note in connection with the acquisition of the Parkersburg,
WV/Marietta, OH MSA which was converted into 995,799 shares of the Company's
Class A Common Stock during November 1995.

During November 1995, the Company sold an additional 2.5 million shares of
Class A Common Stock resulting in net proceeds to the Company of $24.1 million.

During November 1995, the Company's shelf registration became effective
with the SEC. The shelf registration for acquisition purposes covers $100.0
million of debt securities (including convertible debt securities), $75.0
million of preferred stock (including convertible preferred stock) and $25.0
million of Class A Common Stock to be issued upon approval of the Board of
Directors.

On November 30, 1995, the Company consummated the formation of the Joint
Venture with SBC in which the Company contributed its system serving the Laredo,
TX MSA and SBC contributed cellular properties in the Illinois 4 and 6 RSAs. The
Company owns 44.5% of the Joint Venture. Under the terms of the Joint Venture
Agreement, the Company will receive distributions in the first four years of the
joint venture rising from $3.3 million in the first year to $5.8 million in the
last year. The Company will also have an option to put its Joint Venture
interest to SBC at prices which began

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at $28.5 million and escalating to $39.0 million at the end of the four-year
period. SBC has the right to purchase the Company's interest during the first
year at approximately $56 million (which includes all of the guaranteed
payments) or on the day prior to the SBC Joint Venture's fourth anniversary at
5% above the then "put" price.

During December 1995 the Company issued 96,000 shares of Series A
Cumulative Convertible Preferred stock, par value $.01 per share for net
proceeds of $79,599,000. The Preferred stock receives dividends at the rate of
6.25% per annum compounded quarterly. Such dividend will not be paid in cash but
will accrue and be calculated on the face value of $1,000 per share. The number
of shares of Class A Common into which the Series A Cumulative Convertible
Preferred Stock is convertible is equal to the quotient obtained by dividing the
conversion value (initially $83,200,320 and increasing to $96,000,000 by the
third anniversary of the original date of issuance or earlier upon the
occurrence of certain contingencies, plus, in each case, accrued dividends
through the date of conversion or, upon the occurrence of certain contingencies,
through the fifth anniversary of the date of issuance) divided by the conversion
price ($11.04 per share subject to adjustment). The Company can effectively
force the conversion of the cumulative convertible shares at such time as the
Company's common stock trades at or above $18.40 per share for 10 out of 15
trading days. The holder of each share of Series A Preferred Stock is entitled
to the number of votes equal to the number of shares of Class A Common Stock the
holder would receive upon conversion.

During February 1996, the Company acquired substantially all of the assets
of the System serving the PA-9 RSA (188,000 Pops) for $26,100,000 in cash. The
PA-9 RSA abuts the WV-2 RSA and WV-3 RSA and McCaw/AT&T's Pittsburgh, PA MSA.

On April 23, 1996, the Company consummated the acquisition of the NY-6 RSA
consisting of approximately 111,000 Pops for $19,800,000. Additionally, the
Company acquired 83% of the Poughkeepsie, NY MSA which has approximately 263,000
Pops for cash and a note together totaling approximately $39,200,000, with
one-half paid in cash and the balance in the Poughkeepsie Note, which is a
three-year prime note with a bullet maturity. The Company will acquire an
additional 11.1% of the Poughkeepsie, NY MSA pursuant to the Orange County
Exchange. See "The Company -- Pending Transactions."

The Company has plans for construction and expansion of property, plant and
equipment over the next 12 months. The Company does not expect these buildout
costs for its existing Systems and Systems to be acquired pursuant to the
Pending Transactions to be material due to the fact that the Company received
equity contributions in the form of cellular switching and transmitting
equipment from McCaw/AT&T Wireless. These contributions included a Northern
Telecom digital supernode switch with expanded port capacity and approximately
100 cell sites with over 1,100 transceivers. Although most of the cell sites
have been deployed, the Company expects that its capital expenditure
requirements will be lower than industry averages for the foreseeable future
given its remaining inventory of cell sites.

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

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

Impact of Recently Issued Accounting Standard

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

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BUSINESS

GENERAL

PriCellular, through its subsidiaries, owns and operates FCC licensed
cellular telephone systems in the United States, primarily in smaller MSAs and
strategically located RSAs. The Company operates its Systems principally in the
Midwest and Mid-Atlantic regions in addition to markets north of New York City
and south of Albany, NY. As of April 30, 1996, the Company owned cellular
interests representing approximately 4.0 million Net Pops and had over 100,000
subscribers before giving effect to the Pending Transactions. The Company sells
and markets its products and services principally under the CELLULAR ONE(R)
brand name through a distribution network of over 50 full service retail stores,
a direct sales force and a select group of agents. In addition, the Company has
formed a strategic alliance with McCaw/AT&T Wireless, a principal stockholder,
allowing it to take advantage of McCaw/AT&T Wireless' acquisition experience,
vendor discounts, centralized "back office" functions and joint marketing
opportunities in markets which are adjacent to McCaw/AT&T Wireless markets.

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

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

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

BUSINESS STRATEGY

Acquisition Strategy

The Company's strategy is to continue to expand its current clusters
through the acquisition of contiguous properties and, secondarily, to target for
purchase other small to mid-sized MSAs and

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

Operating Strategy

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

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

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

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

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customers who purchase cellular service directly from the Company through
its retail stores and direct sales force tend to have fewer complaints
and higher usage than subscribers who activate with independent agents or
independent retailers.

Dedication to Customer Service. The Company strives to maintain a high
level of customer satisfaction through a variety of techniques, including
tying sales commissions to subscriber retention, outbound telemarketing
to subscribers on a regular basis, maintaining 24-hour customer service
and active ongoing contact with new customers. The Company believes that
its emphasis on superior customer service has helped reduce its average
monthly churn rate. For example, in its IPO Systems the churn rate
declined from 2.5% for the three months ended March 31, 1995 to 1.6% for
the three months ended March 31, 1996.

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

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CELLULAR MARKETS AND SYSTEMS

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

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<PAGE> 48

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

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

MARKETS

Upper Midwest Cluster

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

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

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

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

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

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

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

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

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individual license area. The Company acquired the Systems constituting the Upper
Midwest Cluster in seven separate transactions from April 1994 to August 1995.
See "The Company -- Recent Acquisitions".

The Mid-Atlantic Cluster

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

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

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

The New York Cluster

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

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

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

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

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

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

Florence, AL MSA

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

THE SBC JOINT VENTURE

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

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

CELLULAR OPERATIONS

General

The Company has concentrated its recent efforts on creating an integrated
network of Systems in its operating clusters. The Company operates three
clusters of Systems as well as Systems in certain other markets and holds
minority interests in several Systems. As of April 30, 1996, without giving
effect to the Pending Transactions, the Company had over 100,000 subscribers.
Through the participation of its non-wireline Systems in NACN (as described
below) and other special networking arrangements between the Company and other
non-wireline operators of cellular systems in the

49
<PAGE> 51

United States, management believes the Company's subscribers are able to receive
quality coverage throughout the United States.

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

<TABLE>
<CAPTION>
THREE MONTHS ENDED YEARS ENDED DECEMBER 31,
MARCH 31, 1996 -------------------------------
------------------- PRO FORMA ACTUAL ACTUAL
PRO FORMA ACTUAL 1995(A) 1995 1994
--------- ------- --------- ------- -------
<S> <C> <C> <C> <C> <C>
Ending subscribers(1)................ 100,287 95,387 87,059 78,227 17,344
Ending penetration(2)................ 2.6% 2.6% 2.2% 2.2% 1.0%
Average marketing costs per net
subscriber addition(3)............ $ 416 $ 369 $ 495 $ 403 $ n/a
Average monthly revenue per
subscriber(4)..................... 76 79 85 107 n/a
Churn(5)............................. 1.8% 1.6% 2.1% 2.3% n/a
</TABLE>

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

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

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

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

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

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

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

In the IPO Systems, the Company has significantly increased subscribers,
penetration, revenues and operating cash flow since it assumed ownership. For
example, the Company's penetration in the IPO Systems rose to 2.6% at March 31,
1996 up from 1.2% at March 31, 1995 and average monthly churn fell to 1.6% in
the three months ended March 31, 1996 from 2.5% in the corresponding period in
the prior year.

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

50
<PAGE> 52

McCaw/AT&T Wireless' New York City MSA including Westchester and Rockland
counties. The New York Cluster is also adjacent to three MSAs owned by SBC (with
whom the Company has a joint venture in Illinois and Texas).

Subscribers and System Usage

The Company's cellular subscribers have increased from approximately 17,000
as of December 31, 1994 to, on a pro forma basis, over 100,000 as of March 31,
1996. The Company's subscribers fall into 12 major categories: construction,
professional/management, medical, sales, real estate, agriculture, service
industry, transportation, financial, government, manufacturing and other, which
includes low usage subscribers. Reductions in the cost of cellular services have
led to an increase in cellular telephone usage by general consumers for
nonbusiness purposes. In addition, the Company believes that several categories
of its subscribers will develop requirements for specialized cellular
applications, such as wireless data technology. As a result, the Company
believes that there is an opportunity for significant growth in each of its
existing service areas. The Company will continue to seek to broaden its
subscriber base for basic cellular services as well as to increase its offering
of customized services. The sale of custom calling features typically results in
increased usage of cellular telephones by subscribers, thereby further enhancing
revenues.

Marketing

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

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

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

Management has implemented its marketing strategy by training and
compensating its sales force in a manner designed to stress the importance of
customer service, high penetration levels

51
<PAGE> 53

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

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

The Company's sales force works principally out of its own retail stores in
which the Company offers a full line of cellular products and services. As of
March 31, 1996, the Company maintained approximately 50 retail stores. Ranging
from 250 square feet to 2,100 square feet, each store is fully equipped to
handle customer service and telephone maintenance and installation. Some of
these stores are also authorized warranty repair centers. The Company's stores
provide subscriber-friendly retail environments (extended hours, large
selection, an expert sales staff and convenient locations) which make the sales
process quick and easy for the subscriber.

Products and Services

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

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

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

In an effort to provide comprehensive availability of mobile communications
services to its customers throughout North America, the Company has entered into
a distribution agreement with American Mobile Satellite Corporation ("AMSC").
AMSC is licensed by the FCC to provide mobile satellite communication services
which will complement the existing terrestrial cellular system providing mobile
voice, fax and data communications in all areas not covered by cellular service.

52
<PAGE> 54

Subscribers will gain access to AMSC's satellite through a cellular/satellite
mobile phone which will route calls through the cellular network in those areas
covered by cellular service and will process the call via satellite in the
absence of cellular coverage. AMSC anticipates that it will provide commercial
service by the end of 1996.

Customer Service

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

In addition, the Company's customers generally are able to report cellular
telephone service or account problems 24-hours a day to a local office
representative. Management believes its decentralized philosophy and emphasis on
customer service in each of its markets affords it a competitive advantage over
its large competitors who typically centralize customer service outside of the
local market.

System Development and Expansion

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

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

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

Digital Cellular Technology

Over the next decade, it is expected that many cellular systems will
convert from analog to digital technology. This conversion is due in part to
capacity constraints in many of the largest cellular markets, such as New York,
Los Angeles and Chicago. As carriers reach limited capacity

53
<PAGE> 55

levels, certain calls may be unable to be completed, especially during peak
hours. Digital technology increases system capacity and offers other advantages,
often including improved overall average signal quality, improved call security,
potentially lower incremental costs for additional subscribers and the ability
to provide data transmission services. The conversion from analog to digital
technology is expected to be an industry-wide process that will take a number of
years to complete. The exact timing and overall costs of such conversion are not
yet known. Management does not believe that its network will experience capacity
constraints in the foreseeable future that would require converting its network
from analog to digital technology.

COMPETITORS AND ADJOINING SYSTEMS

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

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

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

SERVICE MARKS

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

EMPLOYEES AND AGENTS

As of March 31, 1996, the Company had approximately 375 employees. In
addition, as of such date, the Company had agreements with numerous independent
sales agents, including car dealerships, electronics stores, paging services
companies and independent contractors. None of the Company's employees are
represented by a labor organization, and the Company's management considers its
employee relations to be good.

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<PAGE> 56

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

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

<TABLE>
<CAPTION>
NAME AGE OFFICE
------------------------------- ---- --------------------------------------------
<S> <C> <C>
Robert Price................... 63 Director, President and Assistant Treasurer
Stuart B. Rosenstein........... 35 Vice President, Chief Financial Officer,
Treasurer and Assistant Secretary
Kim I. Pressman................ 39 Director, Vice President, Assistant
Treasurer and Secretary
Steven Price................... 34 Vice President, Corporate Development
Brion B. Applegate............. 42 Director
Tim R. Palmer.................. 37 Director
Scott M. Sperling.............. 38 Director
</TABLE>

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

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

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

55
<PAGE> 57

Ms. Pressman was elected to the Company's Board of Directors as a nominee of the
Price family pursuant to the Stockholders Agreement.

STEVEN PRICE has been a Vice President, Corporate Development of the
Company since December 1994 and prior thereto was Director of Business
Development of the Company since April 1993. From 1990 to 1993, Mr. Price was an
attorney with Davis Polk & Wardwell. Prior thereto, Mr. Price was appointed by
President Bush to serve in the U.S. State Department as Special Assistant to the
Chief U.S. Nuclear Arms Negotiator and worked in the mergers and acquisitions
department of Goldman, Sachs & Co. Mr. Price graduated magna cum laude from
Brown University, where he was elected to Phi Beta Kappa, and has a J.D. degree
from Columbia University. Mr. Price is a member of the Board of Directors of the
Cellular Telecommunications Industry Association (CTIA). Steven Price is a
director of Price Communications and is the son of Robert Price.

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

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

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

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

The by-laws of the Company provide for the establishment of an Executive
Committee, which the Board of Directors has established. The by-laws provide
that the Executive Committee shall

56
<PAGE> 58

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

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

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<PAGE> 59

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

OTHER KEY EMPLOYEES

<TABLE>
<CAPTION>
NAME AGE OFFICE
- ----------------------------------- ---- ---------------------------------------------------
<S> <C> <C>
D. Michael Key..................... 47 Director of Engineering
Albert S. Loverde.................. 56 Director of Engineering Services
Randall S. Mattson................. 36 Regional Operations Manager -- Upper Midwest
Donald L. Anderson................. 52 Regional Operations Manager -- Mid-Atlantic Cluster
Mark Dilcom........................ 33 Director of Market Development
Pamela Fontana..................... 30 Director of Corporate Development
Jon Allen.......................... 28 General Manager -- MN-5 RSA
Joseph A. Banaszek................. 34 General Manager -- Wausau, WI MSA
Albert Bodamer..................... 33 General Manager -- NY Systems (South)
Michael G. Brewerton............... 33 General Manager -- WV Systems
Michael Bruno...................... 31 General Manager -- NY Systems (North)
Dwane Menke........................ 33 General Manager -- MN-6 RSA
Larry Rosenblatt................... 32 General Manager -- Eau Claire, WI MSA; WI-1 RSA
Thomas Scholato.................... 50 General Manager -- PA-9 RSA
Dennis Stone....................... 37 General Manager -- Florence, AL MSA
Steven L. Tanner................... 31 General Manager -- Duluth, MN/Superior, WI MSA
Mary Tavernini..................... 35 General Manager -- MI-1 RSA
David Wolmering.................... 36 General Manager -- OH Systems
</TABLE>

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

ALBERT S. LOVERDE is the Director of Engineering Services. Prior to joining
the Company in 1995, he served as Vice President of Technical Operations with
Sterling Cellular, and previously served as Vice President and General Manager
for Airtouch in Atlanta and Executive Director of Mobile Systems for BellSouth
International. Mr. Loverde holds a B.S. from Purdue University and an M.S. in
Engineering Mechanics from NYU.

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

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

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

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

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<PAGE> 60

JON ALLEN is General Manager of the Company's MN-5 RSA. Prior to joining
the Company, Mr. Allen served as Regional Manager for Sterling Cellular's
Michigan markets since 1992. Prior thereto, he served as District Sales Manager
for Airtouch.

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

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

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

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

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

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

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

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

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

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

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

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<PAGE> 61

PRINCIPAL AND SELLING STOCKHOLDERS

The following table provides certain information regarding the beneficial
ownership of the Company's Common Stock as of March 31, 1996 by (i) each of the
Company's directors and officers listed in the summary compensation table, (ii)
all directors and officers as a group and (iii) each person known to the Company
to be the beneficial owner of 5% or more of any class of the Company's voting
securities.

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
OF CLASS A AND B
COMMON STOCK
BEFORE THE OFFERING(1) BENEFICIAL OWNERSHIP OF CLASS A AND B
----------------------- COMMON STOCK AFTER THE OFFERING(1)
PERCENTAGE ------------------------------------------
OF PERCENTAGE OF PERCENTAGE OF
COMBINED SHARES COMBINED COMBINED
NAME OF BENEFICIAL OWNER SHARES CLASS OFFERED(2) SHARES CLASSES VOTING
- ------------------------------------ ----------- ---------- ---------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
DIRECTORS AND OFFICERS
Robert Price(3)..................... 5,466,605 16.6% -- 5,466,605 16.6% 22.7%
Stuart B. Rosenstein(4)............. 133,381 0.4 -- 133,381 0.4 0.1
Kim I. Pressman(5).................. 35,937 0.1 -- 35,937 0.1 --
Steven Price(6)..................... 3,589,687 11.6 -- 3,589,687 11.6 20.2
Brion B. Applegate(7)............... 2,364,483 7.6 -- 1,864,483 6.0 10.2
Tim R. Palmer(8).................... 5,290,976 17.2 -- 2,790,976 9.1 12.4
Scott Sperling(9)................... 4,710,165 13.3 4,710,165 13.3 2.7
All directors and officers as a
group (7 persons)................. 19,915,667 56.1 -- 16,915,667 47.6
OTHER 5% STOCKHOLDERS
McCaw/AT&T Wireless Services,
Inc.(10).......................... 5,230,036 17.0 -- 5,230,036 17.0 20.7
(formerly McCaw)
5400 Carillon Point
Kirkland, WA 98033
</TABLE>

<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Aeneas Venture Corporation.......... 5,290,976 17.2 2,500,000 2,790,976 9.1 12.4
(an affiliate of Harvard Private
Capital Group, Inc.)(11)
600 Atlantic Avenue, 26th Floor
Boston, MA 02210
The Thomas H. Lee Company(12)....... 4,710,165 13.3 -- 4,710,165 13.3 2.7
75 State Street
Boston, MA 02109
Putnam Investments, Inc.(13)........ 3,975,572 11.7 -- 3,975,572 11.7 2.3
One Post Office Square
Boston, MA 02109
Eileen Farbman(14).................. 3,714,062 12.1 -- 3,714,062 12.1 22.2
c/o Suite 3200
45 Rockefeller Plaza
NY, NY 10020
Janus Capital Corp.(15)............. 3,063,438 9.9 -- 3,063,438 9.9 1.8
100 Fillmore Street
Denver, CO 80206
Spectrum Equity Investors,
L.P.(16).......................... 2,364,483 7.6 500,000 1,864,483 6.0 10.2
121 High Street, 26th Floor
Boston, MA 02110
The Public School Employes'
Retirement System(17)............. 2,355,082 7.1 -- 2,355,082 7.1 1.4
5 North 5th Street, Box 125
Harrisburg, PA 17108
Price Communications
Corporation(18)................... 2,205,667 6.8 -- 2,205,667 6.8 9.1
Suite 3200
45 Rockefeller Plaza
NY, NY 10020
Leo Farbman(19)..................... 1,218,750 4.0 -- 1,218,750 4.0 7.3
c/o Suite 3200
45 Rockefeller Plaza
NY, NY 10020
</TABLE>

60
<PAGE> 62

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
OF CLASS A AND B
COMMON STOCK
BEFORE THE OFFERING(1) BENEFICIAL OWNERSHIP OF CLASS A AND B
----------------------- COMMON STOCK AFTER THE OFFERING(1)
PERCENTAGE ------------------------------------------
OF PERCENTAGE OF PERCENTAGE OF
COMBINED SHARES COMBINED COMBINED
NAME OF BENEFICIAL OWNER SHARES CLASS OFFERED(2) SHARES CLASSES VOTING
- ------------------------------------ ----------- ---------- ---------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alexandra Farbman(20)............... 1,218,750 4.0 -- 1,218,750 4.0 7.3
c/o Suite 3200
45 Rockefeller Plaza
NY, NY 10020
Stein Roe & Farnham
Incorporated(21).................. 1,125,000 3.7 -- 1,125,000 3.7 0.7
One South Wacker Drive
Chicago, IL 60606
Neuberger & Berman L.P.(22)......... 798,438 2.6 -- 798,438 2.6 0.5
605 Third Avenue
New York, NY 10158
Dominion Cellular, Inc.(23)......... 718,860 2.3 500,000 218,860 0.7 0.1
355 Madison Avenue
Morristown, NJ 07960
OTHER SELLING STOCKHOLDERS
Investment Advisors, Inc.(24)....... 323,477 1.1 100,000 223,477 0.7 1.3
3700 First Bank Place
Minneapolis, MN 55440-0357
</TABLE>

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

(2) Assumes no exercise of the Underwriters' over-allotment option to purchase
up to 540,000 shares of Class A Common Stock. If the Underwriters' exercise
this option in whole or in part, the shares will be sold by the following
stockholders in the following respective amounts:

(3) Consists of 340,627 shares of Class B Common Stock owned directly by Mr.
Price, 1,104,687 shares of Class B Common Stock held by Robert Price and
Eileen Farbman, as joint tenants, 1,104,687 shares of Class B Common Stock
held by Robert Price and Steven Price, as joint tenants, options to
purchase 117,187 shares of Class A Common Stock granted pursuant to the
Company's 1994 Stock Option Plan that are currently exercisable, options to
purchase 593,750 shares of Class A Common Stock previously granted to Mr.
Price that are currently exercisable, 750,000 shares of Class A Common
Stock held by Price Communications and warrants to purchase 1,455,667
shares of Class B Common Stock held by Price Communications that are
currently exercisable. See footnote (18).

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

61
<PAGE> 63

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

(6) Consists of 2,254,688 shares of Class B Common Stock owned directly by Mr.
Price, 1,104,687 shares of Class B Common Stock held by Robert Price and
Steven Price, as joint tenants, 107,656 shares of Class A Common Stock
owned directly by Mr. Price and options to purchase 122,656 shares of Class
A Common Stock granted pursuant to the Company's 1994 Stock Option Plan
that are currently exercisable. Does not include options to purchase
117,187 shares of Class A Common Stock granted pursuant to the Company's
1994 Stock Option Plan that are not exercisable within 60 days. Steven
Price is the son of Robert Price.

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

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

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

(10) Consists of 3,390,625 shares of Class B Common Stock and 1,839,411 shares
of Class A Common Stock.

(11) Consists of 795,975 shares of Class A Common Stock, 4,495,001 shares of
Class B Common Stock currently outstanding and warrants to purchase 45,020
shares of Class B Common Stock that are currently exercisable. The per
share price at which shares may be purchased pursuant to the warrants is
$5.94 subject to adjustment.

(12) Consists of 4,710,165 shares of Class A Common Stock currently issuable
(subject to adjustments) upon conversion of 54,728 shares of the Company's
Series A Cumulative Convertible Preferred Stock (the "Convertible Preferred
Stock") held by Thomas H. Lee Equity Fund III L.P. and 5,272 shares of
Convertible Preferred Stock held by THL-CCI Investors Limited Partnership.
See "Description of Capital Stock".

(13) Consists of 3,058,384 shares of Class A Common Stock issuable upon
conversion of the Company's outstanding 10 3/4% Senior Subordinated
Convertible Discount Notes due 2004 and 917,188 shares of Class A Common
Stock. Information with respect to the shares of Class A Common Stock held
is based on a Schedule 13G dated February 8, 1995, which reflects the
collective beneficial ownership of Marsh & McLennan Companies, Inc., Putnam
Investments, Inc. and its two wholly owned registered investment advisers
(Putnam Investment Management, Inc. and The Putnam Advisory Company, Inc.)
and the Putnam New Opportunities Fund (the "Fund") (collectively, the
"Putnam Entities"). According to the Schedule 13G, none of the Putnam
Entities have the sole power to vote or dispose of any such shares of Class
A Common Stock nor (except the Fund with respect to 405,000 of such shares)
the shared power to vote any of such shares and all of the Putnam Entities
have the shared power to dispose of such shares.

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

62
<PAGE> 64

Class B Common Stock held by Eileen Farbman as custodian for Alexandra
Farbman UGTMA until age 21. Eileen Farbman is the daughter of Robert Price.

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

(16) Consists of 1,644,792 shares of Class B Common Stock, 248,675 shares of
Class A Common Stock currently outstanding and 471,016 shares of Class A
Common Stock currently issuable upon conversion of 6,000 shares of the
Convertible Preferred Stock.

(17) Consists of 2,305,082 shares of Class A Common Stock currently issuable
upon conversion of 30,000 shares of the Convertible Preferred Stock.

(18) Consists of 750,000 shares of Class A Common Stock currently outstanding
and 1,455,667 shares of Class B Common Stock issuable pursuant to warrants
that are currently exercisable. The per share price at which shares may be
purchased pursuant to the warrants is $5.94 subject to adjustment.

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

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

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

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

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

(24) Consists of 323,477 shares of Class B Common Stock.

63
<PAGE> 65

DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 100,000,000 shares
of Class A Common Stock, par value $.01 per share, 20,000,000 shares of Class B
Common Stock, par value $.01 per share, and 10,000,000 shares of Preferred
Stock, issuable in series. As of April 22, 1996, there were 13,522,046 shares of
Class A Common Stock, 17,269,621 shares of Class B Common Stock and 96,000
shares of Series A Cumulative Convertible Preferred Stock outstanding. The
following summary description of the capital stock of the Company is qualified
in its entirety by reference to the Certificate of Incorporation and the Bylaws
of the Company, copies of which have been filed as exhibits to the Registration
Statement of which this Prospectus is a part.

COMMON STOCK

DIVIDENDS

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

VOTING RIGHTS

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

CONVERSION RIGHTS

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

LIQUIDATION RIGHTS

Upon any liquidation, dissolution or winding up of the affairs of the
Company, whether voluntary or involuntary, any assets remaining after the
satisfaction in full of the prior rights of creditors, and the aggregate
liquidation preference of any Preferred Stock then outstanding will be
distributed to

64
<PAGE> 66

the holders of Class A Common Stock and Class B Common Stock, ratably as a
single class in proportion to the number of shares held by them.

REORGANIZATION, CONSOLIDATION OR MERGER

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

PREEMPTIVE RIGHTS

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

TRANSFERABILITY

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

TRANSFER AGENT AND REGISTRAR OF COMMON STOCK

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

PREFERRED STOCK

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

SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK

The Board of Directors has designated 96,000 shares of Series A Cumulative
Convertible Preferred Stock. The holders of shares of the Series A Cumulative
Convertible Preferred Stock are

65
<PAGE> 67

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

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

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

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

Each share of the Series A Cumulative Convertible Preferred Stock may, at
the option of the holder thereof, be converted at any time into a number of
shares of Class A Common Stock equal to the quotient obtained by dividing the
"conversion value" by the conversion price of $11.04 subject to adjustment.
Pursuant to the certificate of designation, "conversion value" per share of
Series A Cumulative Convertible Preferred Stock shall be an amount equal to
$1,000 plus accrued and unpaid dividends thereon to the date of conversion and
the premium amount; provided, however, that in the event of a conversion during
the periods specified below and which conversion is not (i) as a result of the
Company exercising its optional redemption or in connection with a change of
control or

66
<PAGE> 68

liquidation, (ii) at such time when the Company owns less than 90% of the voting
securities of PriCellular Wireless Corporation or (iii) at such time as certain
of the existing stockholders have the power to vote securities of the Company
which represent 50% or more of the combined voting power of the Company, the
conversion value with respect to each share of Series A Cumulative Convertible
Preferred Stock then being converted shall be reduced by the "premium amount"
plus the amount set forth below:

<TABLE>
<CAPTION>
CONVERSION DATE REDUCTION TO CONVERSION VALUE
- ---------------------------- -----------------------------
<S> <C>
Prior to December 28, 1996 $133.33
December 28, 1996
through December 28, 1997 $100.00
December 29, 1997
through December 28, 1998 $ 66.67
</TABLE>

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

BUSINESS COMBINATION STATUTE

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

67
<PAGE> 69

SHARES ELIGIBLE FOR FUTURE SALE

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

Upon the closing of this offering, the Company will have 30,791,667 shares
of Common Stock outstanding. Of these shares, 13,747,866 of the shares of Class
A Common Stock will be freely tradeable without restriction (subject to the
volume and other limitations under Rule 144 in the case of affiliates of the
Company) and the remaining 1,839,411 shares of Class A Common Stock and the
15,204,390 outstanding shares of Class B Common Stock will be "restricted
securities" as defined in Rule 144. Without consideration of the contractual
restrictions described below, 15,204,390 of the restricted shares would be
available for immediate sale in the public market subject to volume and other
limitations under Rule 144. All of the Selling Stockholders have agreed, subject
to certain limitations, that for a period of 90 days after the date of this
offering they will not, without the prior written consent of Goldman, Sachs &
Co., offer, sell, contract to sell, grant any option to purchase, or otherwise
dispose of any Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or in any other manner transfer all or a portion
of the economic consequences associated with the ownership of Common Stock. If
and to the extent Goldman, Sachs & Co. should release such shares earlier, they
would be available for immediate sale in the public market (subject to the
volume and other limitations under Rule 144 in the case of affiliates of the
Company) subject to the limitation of the Stockholders Agreement.

In general, under Rule 144 as currently in effect, if two years have
elapsed since the later of the date of acquisition of restricted shares from the
Company or any "affiliate" of the Company, as that term is defined under the
Securities Act, the acquiror or subsequent holder thereof is entitled to sell
within any three-month period a number of shares that does not exceed the
greater of 1% of the then outstanding shares of the Company's Class A Common
Stock (15,587,277 shares immediately after this offering) or the average weekly
trading volume of the Company's Common Stock on all exchanges and/or reported
through the automated quotation system of a registered securities association
during the four calendar weeks preceding the date on which notice of the sale is
filed with the Securities and Exchange Commission. Sales under Rule 144 are also
subject to certain manner of sales provisions, notice requirements and the
availability of current public information about the Company. If three years
have elapsed since the later of the date of acquisition of restricted shares
from the Company or from any affiliate of the Company, and the acquiror or
subsequent holder thereof is deemed not to have been an affiliate of the Company
at any time during the 90 days preceding a sale, such person would be entitled
to sell such shares in the public market under Rule 144(k) without regard to the
volume limitations, manner of sale provisions, public information requirements
or notice requirements.

Following the closing of this offering, the Company's existing stockholders
will hold shares of Common Stock and will be entitled to certain
rights with respect to the registration of all such shares under the Securities
Act.

68
<PAGE> 70

UNDERWRITING

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

<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
CLASS A
UNDERWRITER COMMON STOCK
----------------------------------------------------------- ------------
<S> <C>
Goldman, Sachs & Co........................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..................................
PaineWebber Incorporated...................................
------------
Total................................................. 3,600,000
===============
</TABLE>

Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the shares offered hereby,
if any are taken.

The Underwriters propose to offer the shares of Class A Common Stock in
part directly to the public at the initial public offering price set forth on
the cover page of this Prospectus and in part to certain securities dealers at
such price less a concession of $ per share. The Underwriters may
allow, and such dealers may reallow, a concession not in excess of $
per share to certain brokers and dealers. After the shares of Class A Common
Stock are released for sale to the public, the offering price and other selling
terms may from time to time be varied by the representatives.

The Selling Stockholders have granted the Underwriters an option
exercisable for 30 days after the date of this Prospectus to purchase up to an
aggregate of 540,000 additional shares of Class A Common Stock to cover
over-allotments, if any. If the Underwriters exercise their over-allotment
option, the Underwriters have severally agreed, subject to certain conditions,
to purchase approximately the same percentage thereof that the number of shares
to be purchased by each of them, as shown in the foregoing table, bears to the
3,600,000 shares of Class A Common Stock offered.

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

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

69
<PAGE> 71

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

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

LEGAL MATTERS

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

EXPERTS

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

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

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

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

The balance sheet of Cellular 10, Inc. as of December 31, 1993 and 1994 and
the related statements of operations, stockholders' deficit and cash flows for
the two years ended December 31, 1994 incorporated by reference in this
Prospectus and Registration Statement have been audited by Breazeale, Saunders &
O'Neil, Ltd., independent auditors, as set forth in their report

70
<PAGE> 72

thereon incorporated by reference elsewhere herein and in the Registration
Statement and is included in reliance upon such report given upon the authority
of such firm as experts in accounting and auditing.

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

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

The balance sheet of Parkersburg Cellular Telephone Company, Inc., as of
December 31, 1995 and the related statement of operations and changes in
stockholders' equity and cash flows for the year ended December 31, 1993,
incorporated by reference in this Prospectus and Registration Statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto and is incorporated by reference
in reliance upon the authority of such firm as experts in accounting and
auditing in giving said reports.

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

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

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

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

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

71
<PAGE> 73

CERTAIN TERMS

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

72
<PAGE> 74

INDEX TO FINANCIAL STATEMENTS

PRICELLULAR CORPORATION AND SUBSIDIARIES

<TABLE>
<CAPTION>
PAGE
<S> <C>
Consolidated Balance Sheets -- March 31, 1996 (unaudited) and December 31, 1995...... F-2
Unaudited Condensed Consolidated Statements of Operations for the three months ended
March 31, 1996 and 1995............................................................ F-3
Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended
March 31, 1996 and 1995............................................................ F-4
Notes to Unaudited Condensed Consolidated Financial Statements....................... F-5
Report of Independent Auditors....................................................... F-7
Consolidated Balance Sheets -- December 31, 1995 and 1994............................ F-8
Consolidated Statements of Operations -- Years Ended December 31, 1995, 1994 and
1993............................................................................... F-9
Consolidated Statements of Stockholders' Equity -- Years Ended December 31, 1995,
1994 and 1993...................................................................... F-10
Consolidated Statements of Cash Flows -- Years Ended December 31, 1995, 1994 and
1993............................................................................... F-11
Notes to Consolidated Financial Statements........................................... F-12
</TABLE>

F-1
<PAGE> 75

PRICELLULAR CORPORATION AND SUBSIDIARIES

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

<TABLE>
<CAPTION>
DECEMBER 31,
1995
MARCH 31, ------------
1996
-----------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents....................................... $ 94,873 $123,444
Accounts receivable (less allowance of $2,298 in 1996 and $2,076
in 1995)..................................................... 9,674 8,725
Inventory....................................................... 1,605 1,651
Other current assets............................................ 4,766 4,744
-------- --------
Total current assets.............................................. 110,918 138,564
FIXED ASSETS -- AT COST:
Cellular facilities and equipment............................... 65,099 58,050
Less accumulated depreciation................................... (8,213) (6,009)
-------- --------
Net fixed assets.................................................. 56,886 52,041
Investment in cellular operations................................. 37,637 37,386
Cellular licenses (less accumulated amortization of $5,553 in 1996
and $3,833 in 1995)............................................. 308,140 305,375
Cellular licenses held for sale, net.............................. 21,000 --
Deferred financing costs (less accumulated amortization of $1,436
in 1996 and $1,029 in 1995)..................................... 11,028 11,386
Other assets...................................................... 38 14
-------- --------
Total assets............................................ $ 545,647 $544,766
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses........................... $ 16,615 $ 15,777
Long-term debt -- current portion............................... 389 1,971
Income taxes payable............................................ 524 872
Other current liabilities....................................... 3,532 3,529
-------- --------
Total current liabilities.................................... 21,060 22,149
Long-term debt.................................................... 324,845 315,216
Other long-term liabilities....................................... 1,615 1,673
STOCKHOLDERS' EQUITY:
Preferred Stock $0.01 par:
Series A, cumulative convertible: authorized 10,000,000
shares; issued and outstanding 96,000 shares................ 1 1
Common Stock, $0.01 par:
Class A: Authorized 100,000,000 shares (1996) and 40,000,000
shares (1995); issued and outstanding 13,522,046 (1996) and
13,572,089 (1995)........................................... 135 136
Class B: Authorized 20,000,000 shares; issued and outstanding
17,269,624................................................. 173 173
Additional paid-in capital...................................... 214,966 215,618
Accumulated deficit............................................. (17,148) (10,200)
-------- --------
Total stockholders' equity................................... 198,127 205,728
-------- --------
Total liabilities and stockholders' equity.............. $ 545,647 $544,766
======== ========
</TABLE>

See notes to consolidated financial statements.

F-2
<PAGE> 76

PRICELLULAR CORPORATION AND SUBSIDIARIES

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

<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31
---------------------
1996 1995
-------- --------
<S> <C> <C>
REVENUES
Cellular service..................................................... $ 19,512 $ 5,346
Equipment sales...................................................... 752 187
Other 998 --
-------- --------
21,262 5,533
COSTS AND EXPENSES
Cost of cellular service............................................. 5,435 1,694
Cost of equipment sold............................................... 2,312 629
General and administrative........................................... 3,533 1,378
Sales and marketing.................................................. 3,851 701
Depreciation and amortization........................................ 4,557 1,873
-------- --------
19,688 6,275
-------- --------
Operating income (loss) 1,574 (742)
OTHER INCOME (EXPENSE)
Gain on sale of investment in cellular operations.................... -- 11,598
Interest expense, net................................................ (8,772) (3,081)
Other income......................................................... 250 --
-------- --------
(8,522) 8,517
-------- --------
Income (loss) before income taxes.................................... (6,948) 7,775
Provision for income taxes........................................... -- (1,150)
-------- --------
Net income (loss).................................................... $ (6,948) $ 6,625
========= =========
Net income (loss) per share.......................................... $ (.23) $ .27
========= =========
Weighted average number of common shares used in computation of net
income (loss) per share............................................ 30,801,000 24,856,000
</TABLE>

See notes to condensed consolidated financial statements.

F-3
<PAGE> 77

PRICELLULAR CORPORATION AND SUBSIDIARIES

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

<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31
-----------------------
1996 1995
--------- ---------
<S> <C> <C>
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES................ $ 5,901 $ (4,763)
-------- --------
INVESTING ACTIVITIES
Purchase of cellular equipment..................................... (5,278) (641)
Purchase of cellular licenses...................................... (437) (84)
Sale of investment in cellular operations.......................... -- 19,478
Acquisition of cellular operations, net of cash of $16 (1995)...... (26,106) (24,809)
Investment in cellular operations.................................. (271) (193)
-------- --------
Net cash used in investing activities.............................. (32,092) (6,249)
-------- --------
FINANCING ACTIVITIES
Proceeds from sale of common stock................................. -- 2,601
Repayments of notes payable........................................ (1,690) (2,381)
Costs incurred in connection with the issuance of preferred and
common stock..................................................... (201) --
Payments for deferred financing costs.............................. (49) (121)
Purchase and retirement of common stock............................ (450) (501)
-------- --------
Net cash used in financing activities.............................. (2,380) (402)
-------- --------
Decrease in cash and cash equivalents.............................. (28,571) (11,414)
Cash and cash equivalents at beginning of period................... 123,444 45,411
-------- --------
Cash and cash equivalents at end of period......................... $ 94,873 $ 33,997
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest......................................................... $ 119 $ 281
Income taxes..................................................... 348 2,404
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES
Purchase of cellular equipment..................................... -- 328
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES
Debt issued in exchange for unregistered debt...................... -- 115,755
</TABLE>

See notes to condensed consolidated financial statements.

F-4
<PAGE> 78

PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

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

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

NET INCOME (LOSS) PER SHARE

Net income (loss) per share for the three months ended March 31, 1996 and
March 31, 1995 was computed by using the weighted average shares outstanding
during the periods after giving retroactive effect to the 5-for-4 Class A and
Class B Common Stock splits in March 1996 and August 1995.

2. ACQUISITION OF CELLULAR OPERATIONS

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

3. COMMON STOCK

During 1995, the Company's Board of Directors authorized the Company to
purchase up to 750,000 shares of its Common Stock on the open market or in
private transactions from time to time. During the first quarter of 1996, the
Company repurchased and retired 50,000 shares of its Common Stock on the open
market at $9.00 per share.

To date, the Company has repurchased and retired 209,062 shares of its
Common Stock.

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

4. SUBSEQUENT EVENTS

NEW YORK CLUSTER

On April 23, 1996, the Company consummated the acquisitions of the NY-6 RSA
and 83% of the Dutchess County MSA from United States Cellular Corporation
increasing its New York contiguous cluster to over 750,000 Pops.

F-5
<PAGE> 79

PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

The Dutchess County MSA abuts the NY-6 RSA and PriCellular's NY-5 RSA. It
extends the Company's New York cluster across the Hudson Valley from the
Connecticut and Massachusetts border 100 miles west to the Binghamton area. The
MSA has approximately 263,000 Pops of which the Company acquired 83% for
approximately $178 per Pop or $39,200,000, with one-half paid in cash and the
balance in a three-year prime note with a bullet maturity.

During April 1996, the Company entered into a contract to sell, subject to
FCC approval, its stand alone AL-4 RSA for gross proceeds of $27,500,000 (of
which $2,500,000 is allocated to a two year covenant not to compete) in cash or
approximately $200 per Pop. The cellular license was acquired in November 1995,
for $10,000,000 in cash and a $10,000,000 convertible note which was converted
into 1,468,750 shares of the Company's Class A common stock on the closing date.

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

On April 11, 1996, the Company announced that it will request large and
founding shareholders to register and sell a portion of their already
outstanding and privately held stock to increase liquidity of its Class A Common
Stock without creating dilution. Founding shareholders AT&T/McCaw, the Price
family, the Thomas H. Lee Company and the Pennsylvania Public School Employees'
Retirement System have stated that as of this date they will not participate in
this sale. It is expected that Harvard and Spectrum Equity Investors, L.P. will
comply with the Company's request to create liquidity without dilution and sell
a portion of these shares.

F-6
<PAGE> 80

REPORT OF INDEPENDENT AUDITORS

Board of Directors
PriCellular Corporation

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

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

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

ERNST & YOUNG LLP

New York, New York
January 24, 1996

F-7
<PAGE> 81

PRICELLULAR CORPORATION AND SUBSIDIARIES

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

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

See notes to consolidated financial statements.

F-8
<PAGE> 82

PRICELLULAR CORPORATION AND SUBSIDIARIES

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

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------------------
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
REVENUES
Cellular service.............................. $ 38,757 $ 4,825 $ 3,702
Equipment sales............................... 1,717 384 107
Other......................................... 1,030 -- --
-------- ------- -------
41,504 5,209 3,809
COSTS AND EXPENSES
Cost of cellular service...................... 10,694 1,892 835
Cost of equipment sold........................ 4,951 814 255
General and administrative.................... 9,048 4,854 1,280
Sales and marketing........................... 7,464 1,151 379
Depreciation and amortization................. 10,337 2,720 1,695
-------- ------- -------
42,494 11,431 4,444
-------- ------- -------
Operating loss............................. (990) (6,222) (635)
OTHER INCOME (EXPENSE)
Gain on sale of investments in cellular
operations................................. 11,598 6,819 11,986
Interest expense.............................. (22,953) (2,236) (458)
Interest income............................... 4,114 296 187
Other income (expense), net................... 520 (97) (439)
-------- ------- -------
(6,721) 4,782 11,276
-------- ------- -------
Income (loss) before provision for income
taxes.................................... (7,711) (1,440) 10,641
Provision for income taxes...................... -- -- (172)
-------- ------- -------
Income (loss) before extraordinary item.... (7,711) (1,440) 10,469
Extraordinary item:
Gain on early extinguishment of debt of $150,
net of tax................................. -- -- 147
-------- ------- -------
Net income (loss).......................... $ (7,711) $ (1,440) $ 10,616
======== ======= =======
Income (loss) per share before extraordinary
item.......................................... $ (0.37) $ (0.10) $ 0.69
Extraordinary item per share.................... -- -- 0.01
-------- ------- -------
Net income (loss) per share................ $ (0.37) $ (0.10) $ 0.70
======== ======= =======
Weighted average number of common shares used in
computation of net income (loss) per share.... 20,617,000 14,735,000 15,184,000
======== ======= =======
</TABLE>

See notes to consolidated financial statements.

F-9
<PAGE> 83

PRICELLULAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
SERIES A CLASS A CLASS B
PREFERRED STOCK COMMON STOCK COMMON STOCK ADDITIONAL
--------------- --------------- ------------------ PAID-IN ACCUMULATED
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT
------ ------ ------ ------ -------- ------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance -- December 31, 1992................. 975,000 $9,750 $ 11,490 $ (11,665)
Shares repurchased and retired............... (968,760) (9,688 ) (8,428)
Net income for the year ended December 31,
1993....................................... 10,616
-- --
------ ---- ------ ---- -------- ----------
Balance -- December 31, 1993................. 6,240 62 3,062 (1,049)
Shares issued during the year ended December
31, 1994 for cash, equipment and minority
interests in cellular operations........... 2,031 20 10,365
Shares repurchased and retired............... (146) (1 ) (899)
Shares issued during the year ended December
31, 1994 for conversion of Series A
Preferred Stock............................ 5,425 54 27,365
Shares issued during the year ended December
31, 1994 for conversion of Series B
Preferred Stock............................ 1,076 11 5,989
Shares issued in connection with the initial
public offering, net....................... 5,000 $ 50 34,647
Net loss for the year ended December 31,
1994....................................... (1,440)
-- --
------ ---- ------ ---- -------- ----------
Balance -- December 31, 1994................. 5,000 50 14,626 146 80,529 (2,489)
Additional shares issued in connection with
the initial public offering................ 375 4 2,563
Purchase of treasury shares..................
Retirement of treasury shares................ (127 ) (1) (769)
Shares issued in connection with exercise of
Harvard and Spectrum options............... 828 8 4,992
Common stock issued for cash................. 2,000 20 24,046
Conversion of Class B Common Stock to Class A
Common Stock............................... 810 8 (810) (8 )
Shares issued in connection with acquisition
of Parkersburg, WV MSA cellular system..... 797 8 9,751
Shares issued in connection with acquisition
of AL-4 RSA cellular system................ 1,175 12 14,970
Preferred Stock issued for cash.............. 96 $1 79,598
Net loss for the year ended December 31,
1995....................................... (7,711)
-- --
------ ---- ------ ---- -------- ----------
Balance -- December 31, 1995................. 96 $1 10,858 $109 13,816 $ 138 $215,680 $ (10,200)
== == ====== ==== ====== ==== ======== ==========

<CAPTION>
TREASURY
STOCK TOTAL
--------------- STOCKHOLDERS'
SHARES AMOUNT EQUITY
------ ------ -------------
<S> <C> <C> <C>
Balance -- December 31, 1992................. $ 9,575
Shares repurchased and retired............... (18,116)
Net income for the year ended December 31,
1993....................................... 10,616

---- ----- --------
Balance -- December 31, 1993................. 2,075
Shares issued during the year ended December
31, 1994 for cash, equipment and minority
interests in cellular operations........... 10,385
Shares repurchased and retired............... (900)
Shares issued during the year ended December
31, 1994 for conversion of Series A
Preferred Stock............................ 27,419
Shares issued during the year ended December
31, 1994 for conversion of Series B
Preferred Stock............................ 6,000
Shares issued in connection with the initial
public offering, net....................... 34,697
Net loss for the year ended December 31,
1994....................................... (1,440)

---- ----- --------
Balance -- December 31, 1994................. 78,236
Additional shares issued in connection with
the initial public offering................ 2,567
Purchase of treasury shares.................. (127) $(770 ) (770)
Retirement of treasury shares................ 127 770
Shares issued in connection with exercise of
Harvard and Spectrum options............... 5,000
Common stock issued for cash................. 24,066
Conversion of Class B Common Stock to Class A
Common Stock...............................
Shares issued in connection with acquisition
of Parkersburg, WV MSA cellular system..... 9,759
Shares issued in connection with acquisition
of AL-4 RSA cellular system................ 14,982
Preferred Stock issued for cash.............. 79,599
Net loss for the year ended December 31,
1995....................................... (7,711)

---- ----- --------
Balance -- December 31, 1995................. -- $ -- $ 205,728
==== ===== ========
</TABLE>

See notes to consolidated financial statements.

F-10
<PAGE> 84

PRICELLULAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
------------------------------------
1995 1994 1993
--------- --------- --------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss).......................................................... $ (7,711) $ (1,440) $ 10,616
Adjustments to reconcile net income (loss) to net cash provided by (used
in)
operating activities:
Depreciation and amortization............................................ 10,337 2,720 1,695
Interest on Senior Subordinated and Convertible Discount Notes........... 22,212 1,672 --
Gain on sale of investment in cellular operations........................ (11,598) (6,819) (11,986)
Gain on early extinguishment of debt..................................... -- -- (150)
Equity loss from investment in Wichita Falls............................. -- 97 84
Income from Joint Venture................................................ (275) -- --
Amortization of covenant not to compete.................................. (500) -- --
Provision for losses on accounts receivable.............................. 936 99 --
Proceeds from covenant not to compete.................................... 3,000 -- --
Changes in operating assets and liabilities net of effects from partial
sale of
Wichita Falls Celltelco Partnership interest in 1993:
Accounts receivable.................................................... (4,493) (848) 319
Inventory.............................................................. (891) (250) --
Other current assets................................................... (193) (52)
Accounts payable and accrued expenses.................................. 694 3,781 (2,408)
Income taxes payable................................................... (2,553) -- --
Other current liabilities.............................................. (4,490) -- --
Other long-term liabilities............................................ (388) 127 --
Other, net............................................................. 23 82 (18)
-------- -------- -------
Net cash provided by (used in) operating activities.................. 4,110 (831) (1,848)
-------- -------- -------
INVESTING ACTIVITIES
Redemption of short-term investments....................................... 991 -- --
Purchase of cellular equipment............................................. (6,794) (3,013) (205)
Purchase of cellular licenses.............................................. (45,210) (11,223) (4,465)
Proceeds from sale of cellular licenses.................................... 3,550 -- --
Amounts deposited in escrow to acquire cellular properties................. -- (800) (500)
Amount deposited in escrow to bid in Personal Communications Service
auction.................................................................. (4,140) -- --
(Distributions to) proceeds from affiliate................................. (36) 160 --
Proceeds from sale of investment in cellular operations.................... 15,928 3,669 20,214
Acquisition of cellular operations, net of cash............................ (168,476) (119,143) --
Investment in cellular operations.......................................... (166) -- --
-------- -------- -------
Net cash (used in) provided by investing activities.................. (204,353) (130,350) 15,044
-------- -------- -------
FINANCING ACTIVITIES
Distribution to stockholder to repurchase and retire common stock.......... -- (900) (18,116)
Purchase and retirement of common stock.................................... (770) -- --
Proceeds from sale of common stock......................................... 31,633 -- --
Proceeds from capital contributions........................................ -- 32,860 --
Proceeds from initial public offering...................................... -- 34,697 --
Proceeds from sale of preferred stock...................................... 79,599 -- --
Proceeds from notes payable and due to stockholders........................ -- 7,380 4,000
Repayments of notes payable and due to stockholders........................ (3,499) (3,140) (4,802)
Payments for deferred financing costs...................................... (7,601) (4,818) --
Proceeds from issuance of Senior Subordinated Discount Notes............... 143,307 110,276 --
Proceeds from issuance of Senior Subordinated Convertible Discount Notes... 35,607 -- --
-------- -------- -------
Net cash provided by (used in) financing activities.................. 278,276 176,355 (18,918)
-------- -------- -------
Increase (decrease) in cash and cash equivalents............................. 78,033 45,174 (5,722)
Cash and cash equivalents at beginning of year............................... 45,411 237 5,959
-------- -------- -------
Cash and cash equivalents at end of year..................................... $ 123,444 $ 45,411 $ 237
======== ======== =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest................................................................. $ 874 $ 194 $ 510
Income taxes............................................................. 2,803 -- 175
SUPPLEMENTAL SCHEDULE OF NONCASH ACTIVITIES
Capital contribution of equipment and minority interest in cellular
operations............................................................... -- 8,155 --
Contribution of net assets into joint venture.............................. 35,516 -- --
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES
Debt canceled in exchange for capital contributions........................ -- 2,791 --
Debt canceled in connection with the sale of minority interest in cellular
operations............................................................... -- 4,024 --
Shares issued in connection with the acquisition of cellular systems....... 24,741 -- --
Conversion of Class B Common Stock to Class A Common Stock................. 8 -- --
</TABLE>

See notes to consolidated financial statements.

F-11
<PAGE> 85

PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995

1. ORGANIZATION

PriCellular Corporation and Subsidiaries (collectively, the "Company") is
principally engaged in the ownership and operation of cellular telephone
systems. During 1993 the Company sold substantially all of its operating assets
(see Note 8) in anticipation of acquiring new cellular telephone systems (see
Note 3).

2. SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation

The consolidated financial statements include the accounts of the Company
and its subsidiaries. All significant intercompany balances and transactions
have been eliminated in the consolidated financial statements.

Prior to October 1, 1993, the Company's financial statements consolidated
the Wichita Falls Celltelco Partnership's financial position, results of
operations and cash flows. On September 30, 1993, the Company sold 49.5% of its
interest in the partnership reducing the Company's interest to 49.5%. Effective
October 1, 1993, the Company commenced accounting for its interest in the
partnership under the equity method. On June 15, 1994, the Company sold its
remaining 49.5% interest in the partnership (see Note 8).

Use of Estimates

The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes.

Cash Equivalents

The Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.

Short-term Investments

In May 1993, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities" ("FASB 115"). The Company adopted the provisions of
the new standard for investments acquired after January 1, 1994. In accordance
with FASB 115, the Company classified all of its short-term investments as
held-to-maturity based upon the Company's positive intent and its ability to
hold the securities to maturity. Held-to-maturity securities are stated at cost,
adjusted for amortization of premiums and accretion of discounts to maturity.
Such amortization is included in interest income. Short-term investments at
December 31, 1994 consisted of U.S. Government obligations. Such short-term
investments are stated at cost plus accrued interest which approximates market.
These securities matured during the first quarter 1995.

Inventory

Inventory is stated at the lower of cost (first-in, first-out method) or
market. Inventory consists primarily of cellular telephones and accessories.

F-12
<PAGE> 86

PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
Other Current Assets

In October 1995, the Company filed an application to participate in the
auction for 30 MHz broadband Personal Communications Service ("PCS") licenses
conducted by the Federal Communications Commission ("FCC") which commenced in
December 1995. During November 1995, the Company deposited $4,140,000 with the
FCC in accordance with the auction rules. The auction will continue into 1996 at
which time if the Company is not the highest bidder the deposit will be returned
to the Company. The Company's PCS deposit with the FCC is included in other
current assets.

Investments in Cellular Operations

Investments in cellular operations in which the Company's interest is 20%
or more are accounted for under the equity method. Interest in investments that
are less than 20% are accounted for under the cost method.

On November 30, 1995, the Company entered into a Joint Venture with SBC
Communications, Inc. ("SBC"), formerly Southwestern Bell, in which the Company
contributed its system serving the Laredo, TX MSA (approximately 169,000 Pops)
and SBC contributed cellular properties in the Illinois 4 and 6 RSAs. The
Company owns 44.5% of the combined 584,000 Pops or approximately 260,000 Net
Pops. Under the terms of the Joint Venture agreement, the Company will receive
distributions in the first four years of the Joint Venture rising from
$3,300,000 in the first year to $5,800,000 in the last year. The Company also
has an option to put its Joint Venture interest to SBC at prices beginning at
$28,500,000 and escalating to $39,000,000 at the end of the four-year period.
SBC will have operating control of the properties and has certain rights to
purchase the Company's interests in the first year and on the day prior to the
fourth anniversary. The Company's share of net income from the Joint Venture for
the month of December 1995, totalled $275,000, which is included in other
revenue.

At December 31, 1993, the Company maintained an MSA investment, the Wichita
Falls Celltelco Partnership. Subsequent to the sale of 49.5% of the Company's
interest in the Wichita Falls MSA (see Note 8), the Company accounted for the
investment under the equity method. In 1994 and 1993, the Company's share of its
net loss approximated $97,000 and $84,000, respectively.

Consolidated financial information of the Wichita Falls Celltelco
Partnership for the periods July 1, 1994 to June 15, 1994 (Date of Disposition)
and for the three months ended December 31, 1993, is as follows:

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
WICHITA FALLS CELLTELCO PARTNERSHIP
-------------------------------------------
PERIOD
JANUARY 1, 1994 THREE MONTHS
TO JUNE 15, 1994 ENDED
(DATE OF DISPOSITION) DECEMBER 31, 1993
--------------------- -----------------
<S> <C> <C>
Cellular revenue...................... $ 1,775,000 $ 766,000
Operating expenses.................... (1,885,000) (852,000)
----------- ---------
Operating loss........................ (110,000) (86,000)
Other expenses........................ (86,000) (84,000)
----------- ---------
Net loss.............................. $ (196,000) $(170,000)
=========== =========
</TABLE>

F-13
<PAGE> 87

PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
Cellular License

The Company primarily uses a 40 year life to amortize cellular licenses
acquired. Amortization expense for the years ended December 31, 1995, 1994 and
1993 was $4,287,000, $1,262,000 and $1,507,000, respectively.

The Company periodically reviews the carrying value of licenses to
determine whether such amounts are recoverable based on undiscounted future cash
flows of the market to which the license relates, and by comparing the cellular
licenses to the estimated market value of the cellular systems, in order to
determine whether a reduction to fair value is necessary. There have been no
such reductions through December 31, 1995.

Income Recognition

Revenues are recognized during the period service is provided or when
equipment is delivered.

Fixed Assets

Fixed assets are recorded at cost. Depreciation is computed using the
straight-line method over the estimated useful life of the asset of three to
seven years.

Deferred Financing Costs

Deferred financing costs primarily represent underwriting discounts and
related fees incurred in connection with the issuance of the Company's long-term
debt (see Note 4). These costs are being amortized over the terms of the related
debt.

Common Stock Split

On September 14, 1994 the Company's Board of Directors authorized a stock
dividend of Class B Common Stock by way of a 65-for-1 stock split effective
September 14, 1994. In addition, on July 17, 1995, the Company declared a stock
dividend of Class A and Class B Common Stock by way of a 5-for-4 stock split
effective August 4, 1995. All applicable common share data have been
retroactively restated to reflect these dividends.

Stock Based Compensation

The Company grants stock options for a fixed number of shares to employees
with an exercise price equal to the fair value of the shares at the date of
grant. The Company accounts for stock option grants in accordance with APB
Opinion No. 25, Accounting for Stock Issued to Employees, and accordingly,
recognizes no compensation expense for the stock option grants.

Net Income (Loss) per Share

Net income per share for the year ended December 31, 1993 was computed
using the common shares outstanding just prior to the initial public offering,
as if such shares were outstanding as of January 1, 1993, adjusted for the
conversion of Series A and B Convertible Preferred Stock and for Common Stock
equivalents after giving retroactive effect to the 65-for-1 Class B Common Stock
split. Net loss per share for the year ended December 31, 1994 was computed by
using the pro forma shares outstanding as calculated above plus the weighted
average shares outstanding in connection with the initial public offering. Net
loss per share for the year ended December 31, 1995

F-14
<PAGE> 88

PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2. SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
was computed using the weighted average shares outstanding during the period.
The years ended December 31, 1995, 1994 and 1993 have been adjusted to give
retroactive effect to the 5-for-4 Class A and Class B Common Stock split. For
the years ended December 31, 1995 and 1994 no effect has been given to options
outstanding under the Company's 1994 Stock Option Plan, outstanding warrants to
purchase Class B Common Stock, the 12 3/4% Senior Convertible Discount Notes or
the Cumulative Convertible Preferred Stock as the exercise of any of these items
would have an antidilutive effect on net loss per share.

3. ACQUISITION OF CELLULAR OPERATIONS

During the year ended December 31, 1995, the Company successfully
consummated the acquisition of approximately 2,174,000 Pops as shown below. The
Company expanded its Upper Midwest Cluster by adding approximately 708,000
additional Pops enlarging its contiguous service area to over 65,000 square
miles. The Company also strategically acquired a new cluster in Ohio and West
Virginia ("Ohio Cluster") encompassing five contiguous markets covering over
942,000 Pops. The Company increased its Alabama Cluster by over 140,000 Pops and
acquired approximately 384,000 Pops in New York.

The following acquisitions were completed during 1995 and 1994:

<TABLE>
<CAPTION>
ACQUISITION PURCHASE NET POPS
SYSTEM MARKET DATE PRICE ACQUIRED
----------------- ------------------- ------------------- ----------- ---------
<S> <C> <C> <C> <C>
1995
Upper Midwest
Cluster MI-1 RSA March 7, 1995 $17,700,000 208,779
Wausau, WI MSA March 28, 1995 5,400,000 59,640
MN-2A RSA July 7, 1995 (A) 38,236
MN-3B RSA July 7, 1995 (A) 35,572
MN-5 RSA July 7, 1995 (A) 205,456
Alton/Granite City,
IL MSA July 7, 1995 (A) 18,112
Eau Claire, WI MSA July 7, 1995 (A) 14,269
Wausau, WI MSA July 7, 1995 (A) 17,289
MI-2 RSA August 28, 1995 7,200,000(B) 110,514
---------
707,867
---------
Ohio Cluster Parkersburg, WV/
Marietta, OH MSA September 27, 1995 (C) 154,510
OH-7 RSA September 27, 1995 39,800,000 254,949
OH-9 RSA September 27, 1995 28,800,000 279,577
OH-10 RSA September 29, 1995 17,600,000 173,714
WV-2 RSA December 20, 1995 7,800,000 79,307
---------
942,057
---------
Alabama Cluster AL-4 RSA November 7, 1995 (D) 140,200
---------
140,200
---------
New York Cluster NY-5 RSA December 29, 1995 65,900,000 383,960
---------
383,960
---------
TOTAL FOR 1995
2,174,084
=========
</TABLE>

F-15
<PAGE> 89

PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. ACQUISITION OF CELLULAR OPERATIONS -- (CONTINUED)

<TABLE>
<CAPTION>
ACQUISITION PURCHASE NET POPS
SYSTEM MARKET DATE PRICE ACQUIRED
------------------ ------------------ ------------------- ----------- ---------
<S> <C> <C> <C> <C>
1994
Upper Midwest
Cluster Duluth, MN/
Superior, WI MSA April 28, 1994 $18,000,000 241,467
WI-1 RSA April 28, 1994 7,000,000 109,248
Eau Claire, WI MSA April 28, 1994 11,900,000 100,713
MN-6 RSA November 23, 1994 (E) 219,149
WI-3 November 23, 1994 (G) 139,189
WI-6A November 23, 1994 (G) 32,734
Wausau, WI MSA November 23, 1994 (G) 34,125
---------
876,625
---------
Alabama Cluster Florence November 23, 1994 (G) 136,816
AL-1B RSA November 23, 1994 (G) 62,035
---------
198,851
---------
Texas Cluster Laredo, TX, MSA November 23, 1994 (F)(G) 168,924
Lubbock, TX MSA November 23, 1994 (A)(G) 229,046
---------
397,970
---------
TOTAL FOR 1994
1,473,446
=========
</TABLE>

- ---------------
(A) The Company exchanged, with Western Wireless Corporation ("Western
Wireless"), its 100% interest in the Lubbock, TX MSA non-wireline license
consisting of approximately 229,000 Pops for approximately 327,000 Net Pops.
In addition, Western Wireless paid $3,000,000 to secure the Company's
agreement not to compete with Western Wireless within the Lubbock, TX MSA
for a period of three years following the exchange.

(B) On May 22, 1995, the Court of Chancery of the State of Delaware awarded the
right to acquire the MI-2 RSA to the Company, subject to FCC approval, for
approximately $7,200,000, which is payable over several years. The closing
has occurred but the defendant in the lawsuit has appealed the decision. The
111,000 Pop MI-2 RSA includes the eastern portion of Michigan's Upper
Peninsula and abuts the Company's MI-1 RSA.

(C) In connection with the acquisition, the Company paid $9,924,000 in cash and
issued and $8.8 million unsecured five year 6% note convertible at $11 per
share which was converted into 796,639 shares of Class A Common Stock at $11
per share. The Company's stock was valued at $12.25 per share on the date of
conversion.

(D) The purchase price consisted of $10,000,000 in cash and 1,175,000 shares of
the Company's Class A Common Stock.

(E) During October 1994, a subsidiary of CIS and a subsidiary of Century
Telephone Enterprises, Inc. ("CTE") entered into an asset exchange agreement
("MN-6/Pine Bluff Exchange") pursuant to which, on November 23, 1994, CIS
acquired CTE's non-wireline cellular system serving the MN-6 RSA in exchange
for (i) CIS' wireline cellular system serving the Pine Bluff, Arkansas MSA
and (ii) the payment to CTE of approximately $10,475,000. The Company sold a
portion of the MN-6 RSA, representing approximately 31,000 of the 250,149
Pops in the RSA to AT&T Wireless Services Inc. ("AT&T Wireless") for
$3,550,000 in cash.

F-16
<PAGE> 90

PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. ACQUISITION OF CELLULAR OPERATIONS -- (CONTINUED)
(F) On November 30, 1995, the Company contributed its Laredo, TX MSA cellular
system into a Joint Venture with SBC (see Note 2).

(G) These properties were acquired in connection with the Company's acquisition
of CIS. In June 1994, the Company entered into agreements with certain
stockholders of CIS ("CIS Purchase Agreements") pursuant to which it agreed
to purchase, and such stockholders agreed to sell, 335,110 shares of Common
Stock of CIS and 5,698,495 shares of Class B Common Stock of CIS for $2.00
per share and warrants to purchase 587,975 additional shares of Class B
Common Stock of CIS for $0.50 per warrant. Each warrant entitles the holder
thereof to purchase one share of Class B Common Stock of CIS at an exercise
price of $1.50 per share. Each share of Class B Common Stock of CIS entitles
the holder thereof to 10 votes, and each share of Common Stock of CIS
entitles the holder thereof to one vote. The shares of Common Stock, Class B
Common Stock and warrants to purchase Common Stock of CIS are referred to
herein as "CIS Stock." The CIS Stock acquired pursuant to the CIS Purchase
Agreements constituted approximately 46.5% (on a fully diluted basis) of the
equity of CIS and approximately 61.5% (on a fully diluted basis) of the
voting power entitled to vote generally in the election of directors of CIS.
These shares were purchased for approximately $12,467,000.

During August and September 1994, the Company entered into agreements with
each of the CIS banks to which it paid $835,000 for the option to purchase, on
or prior to December 15, 1994, all of the outstanding CIS bank debt, which was
approximately $68,500,000 as of November 23, 1994. Concurrent with the closing
of the 14% Senior Subordinated Discount Notes due 2001 (the "14% Notes") and the
CIS acquisition, the Company paid $60,900,000 which included the option payment
to purchase the CIS bank debt. The option payment was applied towards the
purchase price of CIS.

On August 2, 1994, the Company commenced a cash tender offer ("Tender
Offer") for any and all outstanding shares of Common Stock and Class B Common
Stock of CIS for $2.00 per share and any and all warrants to purchase additional
shares of Class B Common Stock of CIS for $0.50 per warrant. On November 23,
1994, the Company acquired pursuant to the Tender Offer shares of CIS Stock for
$11,809,000 that, together with the shares acquired pursuant to the CIS Purchase
Agreements, represent approximately 90.8% (on a fully diluted basis) of the
equity of CIS and approximately 92.1% (on a fully diluted basis) of the voting
power entitled to vote generally in the election of directors of CIS. The
Company subsequently transferred to Wireless, all CIS Stock acquired by it
pursuant to the CIS Purchase Agreements and the Tender Offer for an aggregate
amount equal to the cost to the Company, including expenses of acquiring the CIS
Stock. The source of funds used by the Company for the CIS Acquisition were the
proceeds from the issuance of the 14% Notes.

In connection with the CIS acquisition, the Company entered into employment
agreements with two executives of CIS (the "Employment Agreements"). The
Employment Agreements provided that the executives received warrants to purchase
up to 14,776 shares of the Company's Series C Preferred Stock which are
convertible into 1,200,550 shares, of the Company's Class B Common Stock,
subject to adjustment. In February 1995, the Company reached an agreement with
the executives to terminate the Employment Agreements, to terminate a lease
agreement between an affiliate of the executives and CIS, and to increase the
exercise price of the warrants for a payment to the executives of approximately
$4,250,000. At December 31, 1994 this payment was included in other current
liabilities and has been included in the purchase price of CIS. In January 1996,
Price Communications, an affiliate of the Company, acquired the warrants which
are now convertible directly into 1,200,550 shares of Class B Common Stock from
the former executives. The effective

F-17
<PAGE> 91

PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. ACQUISITION OF CELLULAR OPERATIONS -- (CONTINUED)
exercise price is $7.46 per share of Class B Common Stock and escalates over the
next four years to $9.84.

The above transactions were accounted for as purchases and, accordingly,
the results of operations of the companies acquired have been included in the
consolidated financial statements from their date of acquisition. The allocation
of purchase price for certain of the above acquisitions is tentative.

The Pro Forma unaudited condensed consolidated results of operations for
the years ended December 31, 1995 and 1994, assuming the transactions were
consummated as of January 1, 1994, are as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------------
1995 1994
------------ ------------
<S> <C> <C>
Revenue...................................... $ 63,751,000 $ 39,459,000
============ ============
Net loss..................................... $(34,712,000) $(45,226,000)
============ ============
Net loss per share........................... $ (1.68) $ (3.07)
============ ============
</TABLE>

4. LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31
-----------------------------
1995 1994
------------ ------------
<S> <C> <C>
14% Senior Subordinated Discount Notes due
2001....................................... $128,160,000 $111,948,000
12 1/4% Senior Subordinated Discount Notes
due 2003................................... 147,925,000 --
10 3/4% Senior Convertible Discount Note due
2004....................................... 36,991,000 --
Other long-term debt......................... 4,111,000 4,984,000
------------ ------------
317,187,000 116,932,000
Less current portion......................... 1,971,000 3,249,000
------------ ------------
$315,216,000 $113,683,000
============ ============
</TABLE>

On November 23, 1994, Wireless issued approximately $165,000,000 aggregate
principal amount of 14% Senior Subordinated Discount Notes due 2001 (the "14%
Notes") primarily to finance the acquisition of CIS. The 14% Notes were issued
at a price of 66.834% or $110,276,000. The original issue discount on the 14%
Notes accretes at a rate of 14%, compounded semiannually, to an aggregate
principal amount of approximately $165,000,000 by November 15, 1997. Interest
will thereafter accrue at 14% per annum, payable semiannually beginning May 15,
1998.

On August 21, 1995, the Company issued approximately $60,000,000 aggregate
principal amount of 10 3/4% Senior Subordinated Convertible Discount Notes due
2004 (the "10 3/4% Notes"). The 10 3/4% Notes were issued at a price of 59.345%
or $35,607,000. The original issue discount on the 10 3/4% Notes accretes at a
rate of 10 3/4%, compounded semiannually, to an aggregate principal amount of
approximately $60,000,000 by August 15, 2000. Interest will thereafter accrue at
10 3/4% per annum, payable semiannually beginning February 15, 2001. The 10 3/4%
Notes are convertible

F-18
<PAGE> 92

PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. LONG-TERM DEBT -- (CONTINUED)

into the Company's Class A Common Stock at a conversion price of $15.53 per
share. The Company can force conversion of the 10 3/4% Notes under certain
circumstances if the Company's Class A Common Stock trades at $21.73 per share
for ten out of fifteen consecutive trading days.

On September 27, 1995, Wireless, issued approximately $205,000,000
aggregate principal amount of 12 1/4% Senior Subordinated Discount Notes due
2003 (the 12 1/4% Notes") to finance the acquisition of the OH-7 RSA, OH-9 RSA,
OH-10 RSA, Parkersburg, WV/Marietta, OH MSA, WV-2 RSA, AL-4 RSA, PA-9 RSA and
NY-5 RSA cellular systems. The 12 1/4% Notes were issued at a price of 69.906%
or $143,307,000. The original issue discount on the 12 1/4% Notes accretes at a
rate of 12 1/4% compounded semiannually to an aggregate principal amount of
approximately $205,000,000 by October 1, 1998. Interest will thereafter accrue
at 12 1/4% per annum payable semiannually beginning April 1, 1999.

The Company's long-term debt includes restrictions on the Company's and
Wireless' debt, on dividends, on liens, on payments and the transfer of net
assets from Wireless to the Company. Restricted net assets of the Company as of
December 31, 1995 approximated $120,913,000.

The maturities of the Company's long-term debt for each of the five years
subsequent to December 31, 1995 are as follows:

<TABLE>
<S> <C>
1996......................................... $ 1,971,000
1997......................................... 389,000
1998......................................... 389,000
1999......................................... 389,000
2000......................................... 389,000
Thereafter................................... 313,660,000
------------
Total.............................. $317,187,000
============
</TABLE>

5. INCOME TAXES

The significant components of the Company's deferred tax liability and
assets are as follows:

<TABLE>
<CAPTION>
DECEMBER 31
---------------------------
1995 1994
----------- -----------
<S> <C> <C>
Deferred tax liabilities:
Depreciation................................. $(4,591,000) $ (560,000)
Amortization................................. (2,738,000) (2,205,000)
Deferred tax assets:
Net operating loss carryforwards............. 3,057,000 2,604,000
Alternative minimum tax carryforwards........ 175,000 175,000
Amortization of original issue discount...... 8,121,000 569,000
State and local deferred taxes............... 888,000 142,000
Accruals..................................... 2,221,000 791,000
Other........................................ 1,556,000 22,000
----------- -----------
Net deferred tax asset......................... 8,689,000 1,538,000
Valuation allowance............................ (8,689,000) (1,538,000)
----------- -----------
$ -- $ --
=========== ===========
</TABLE>

F-19
<PAGE> 93

PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5. INCOME TAXES -- (CONTINUED)
For the year ended December 31, 1993, the Company provided $175,000 for
Federal alternative minimum tax ("AMT").

At December 31, 1995, the Company had tax net operating loss carryforwards
of approximately $8,990,000, which are available to offset future taxable
income. $2,700,000 of the carryforwards expire in the year 2009 and the
remaining amount expires in the year 2010. Pursuant to Section 338 of the
Internal Revenue Code, the Company elected to treat the stock purchase of CIS as
a purchase of assets and, accordingly, accrued approximately $2,000,000 in
Federal income taxes payable representing alternative minimum tax arising as a
result of the election. The Company paid these taxes during 1995.

The reconciliation of income tax at the U.S. federal statutory tax rates to
income tax expense is:

<TABLE>
<CAPTION>
DECEMBER 31, 1993
-----------------
<S> <C>
Tax at U.S. statutory rates of 34%................. $ 3,618,000
Alternative minimum tax............................ 172,000
Utilization of net operating loss carryforwards.... (3,618,000)
-----------
$ 172,000
===========
</TABLE>

6. COMMON STOCK

During March 1993, the Board of Directors authorized the repurchase and
retirement of the shares of common stock of the Company held by Price
Communications Corporation, representing a 74% interest, for $11,000,000 and the
shares held by a wholly-owned subsidiary of Time Warner Inc., for $3,716,000,
representing their 25% interest in the Company. These transactions were
finalized in the last quarter of 1993. During December 1993, the Company also
repurchased and retired an aggregate of 3,510,000 additional shares of the
Company's Class A Common Stock for $3,400,000.

During the second quarter of 1994, the Company entered into the following
transactions:

- AT&T Wireless Services, Inc. ("McCaw/AT&T" or "AT&T Wireless") purchased
2,031,250 shares of Class B Common Stock (Class B shares are entitled to
ten votes per share).

- Harvard Private Capital Group, Inc. ("Harvard") purchased 42,130 shares
of Series A Convertible Preferred Stock.

- Spectrum Equity Investors L.P. ("Spectrum") purchased 6,018 shares of
Series A Convertible Preferred Stock and a $6 million convertible
promissory note which was converted into 12,739 shares of Series B
Convertible Preferred Stock on July 9, 1994. Spectrum assigned and
transferred a portion of the note totaling $1,500,000 to two funds
managed by Investment Advisors, Inc. ("IAI").

In connection with the above mentioned transactions, the Company received
$36,200,000 consisting of cash, capital equipment and minority interests in an
FCC non-wireline cellular license. The capital equipment and minority interest
were valued at $3,385,000 which approximated their historical net book value.

During July 1994, McCaw/AT&T exercised its preemptive rights by purchasing
16,049 shares of the Company's Series A Convertible Preferred Stock for
$7,559,000 in the form of a reduction of notes payable, minority interests in
certain FCC MSA non-wireline cellular licenses, and capital

F-20
<PAGE> 94

PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

6. COMMON STOCK -- (CONTINUED)
equipment. The minority interests and capital equipment were recorded at their
approximate historical net book value.

On December 22, 1994, the Company closed on its initial public offering
("IPO") of 5,000,000 shares of Class A Common Stock resulting in proceeds of
$34,697,000 after deducting expenses related to the offering. Concurrent with
the closing of the IPO, Harvard, Spectrum, McCaw/AT&T and IAI converted all of
their outstanding Series A and B Convertible Preferred Stock of the Company to
3,559,985, 1,315,834, 1,356,140 and 269,133, shares, respectively, of Class B
Common Stock of the Company.

In connection with the over-allotment agreement with the underwriters of
the IPO, during January 1995, the Company sold an additional 375,000 shares of
Class A Common Stock which resulted in net proceeds of approximately $2,567,000.

During February 1995, the Company's Board of Directors authorized the
Company to purchase up to 250,000 shares of its Class A Common Stock in the open
market or in private transactions from time to time. During 1995, the Company
repurchased 127,250 shares of its Common Stock in the open market at prices
ranging from $5.40 to $8.30 per share. In addition, during October 1995, the
Company's Board of Directors authorized the Company to purchase up to an
additional 500,000 shares of its Common Stock in the open market or in private
transactions from time to time. In December 1995, all treasury shares held by
the Company were retired.

On July 14, 1995, Harvard Private Capital Group, Inc. and Spectrum Equity
Investors L.P. exercised an option to purchase a total of 827,815 shares of the
Company's Class A Common Stock. The proceeds to the Company totaled $5,000,000.

On November 22, 1995, the Company sold 2,000,000 shares of Class A Common
Stock to an institutional investor, realizing net proceeds of $24,066,000. The
proceeds from the offering will be used by the Company for general corporate
purposes and in connection with acquisitions of cellular systems and related
cellular interests.

During October 1995, the Company filed a $200,000,000 shelf registration
with the SEC, to be used for acquisition purposes only. The shelf registration
covers $100,000,000 of debt securities (including convertible debt securities),
$75,000,000 of Preferred Stock (including convertible preferred stock) and
$25,000,000 of Class A Common Stock to be issued upon approval of the Board of
Directors. This registration became effective with the SEC during November 1995.

7. PREFERRED STOCK

During December 1995, the Company issued 96,000 shares of Series A
Cumulative Convertible Preferred Stock, par value $.01 per share for gross
proceeds of $80,000,000. The preferred stock accrues dividends at the rate of
6.25% per annum compounded quarterly. Such dividends will not be paid in cash
but will accrue and be calculated on the face value of $1,000 per share. The
number of shares of Class A Common Stock into which the Series A Cumulative
Convertible Preferred Stock is convertible is equal to the quotient obtained by
dividing the conversion value (initially $83,200,320 and increasing to
$96,000,000 by the third anniversary of the original date of issuance or earlier
upon the occurrence of certain contingencies, plus, in each case, accrued
dividends through the date of conversion or, upon the occurrence of certain
contingencies, through the fifth anniversary of the date of issuance) divided by
the conversion price ($13.80 per share subject to adjustment). The Company can
effectively force the conversion of the cumulative convertible shares at such
time as the Company's Class A Common Stock trades at or above $23.00 per share
for 10 out of 15 trading

F-21
<PAGE> 95

PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. PREFERRED STOCK -- (CONTINUED)
days. The holder of each share of Series A Preferred Stock is entitled to the
number of votes equal to the number of shares of Class A Common Stock the holder
would receive upon conversion.

8. SALE OF CELLULAR OPERATIONS

The Company made the following dispositions of cellular properties and
interests:

<TABLE>
<CAPTION>
DATE DESCRIPTION SALES PRICE GAIN (LOSS)
- ------------ ----------------------------------------------- ----------- -----------
<S> <C> <C> <C>
1995
January Abilene, Texas, sale of assets $15,928,000 $11,598,000
March Minnesota 6, sale of a portion of the license
representing 31,000 Pops 3,550,000 --
-----------
$11,598,000
===========
1994
June Wichita Falls Celltelco Partnership, sale of
approximate 49.5% interest $ 7,693,000 $ 6,819,000
===========
1993
April Amarillo Celltelco, sale of minority interest $ 166,000 $ (104,000)
July South Dakota 7 Corporation, sale of assets 2,100,000 1,942,000
August Biloxi-Gulfport, sale of minority interest 1,100,000 649,000
September Texas 6 Corporation, sale of assets 10,000,000 3,780,000
September Wichita Falls Celltelco Partnership, sale of
49.5% of its approximate 99% interest 6,848,000 5,719,000
-----------
$11,986,000
===========
</TABLE>

In connection with the Wichita Falls transaction, the Company entered into
a management agreement whereby it ran the operations and received a management
fee of 6% of the revenue until the remaining 49.5% interest in Wichita Falls was
sold on June 15, 1994. For the period January 1, 1994 to June 15, 1994 and the
three month period ended December 31, 1993, the Company earned approximately
$93,000 and $49,000, respectively, for management fee income.

In 1994, in connection with the sale of Wichita Falls to McCaw/AT&T for
$7,693,000, the Company received net proceeds of $3,829,000. The net proceeds
reflect the sales price of $7,693,000 plus the repayment of $160,000 due from
affiliate less $4,024,000 from cancellation of a portion of the notes payable to
McCaw/AT&T.

9. SUBSEQUENT EVENT

Pennsylvania-9 RSA Acquisition

On February 2, 1996, the Company acquired the PA-9 RSA consisting of
approximately 188,000 Pops from United States Cellular Corporation. The PA-9 RSA
abuts the Company's Ohio Cluster on the south and McCaw/AT&T's Pittsburgh MSA on
the north. The RSA was acquired at a cost of approximately $139 per Pop.

F-22
<PAGE> 96

PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. PENDING TRANSACTIONS

Remaining Shares of CIS Stock

The Company may acquire the remaining shares of CIS Stock as soon as
practicable. Such acquisitions may be effected through privately negotiated or
open market purchases, subsequent tender offers, a merger or similar business
combination between the Company and CIS or otherwise. The Company has included
in other current liabilities $2,525,000 for the acquisition of remaining shares
of CIS Stock.

New York Cluster

The following two acquisitions will increase the Company's New York Cluster
to over 750,000 Pops.

New York-6 RSA Acquisition

On December 26, 1995, the Company exercised an option, subject to among
other things, FCC approval, to acquire the New York-6 RSA consisting of
approximately 111,000 Pops in Greene and Columbia Counties between Albany and
New York City from United States Cellular Corporation. New York-6 abuts
PriCellular's NY-5 RSA and includes 30 miles of the New York State Thruway, 10
miles of the Interstate connecting the New England Thruway with the New York
State Thruway in Albany and 30 miles of the Taconic State Parkway. The
acquisition price of the New York-6 RSA will be approximately $19,800,000.

Poughkeepsie MSA Acquisition

On December 26, 1995, the Company exercised an option, subject to among
other things, FCC and New York State approval, to acquire 83% of the Dutchess
County MSA, which includes the City of Poughkeepsie, from United States Cellular
Corporation. The MSA has approximately 263,000 Pops.

The Dutchess County MSA abuts New York RSA-6 and PriCellular's NY-5 RSA and
extends PriCellular's New York cluster across the Hudson Valley from the
Connecticut and Massachusetts border 100 miles west to the Binghamton area. The
MSA will be acquired for cash and a note totaling approximately $178 per Pop or
$39,200,000, with one-half paid in cash and the balance in a three-year prime
note with a bullet maturity.

11. COMMITMENTS AND CONTINGENCIES

Stock Option Plan

Under the Company's 1994 Stock Option Plan (the "Plan") the Board of
Directors can grant options to purchase up to 1,350,000 shares of Class A Common
Stock to certain eligible employees and directors (Class A shares are entitled
to one vote per share). The Plan provides that the option price cannot be less
than the fair market value of the stock on the date of grant.

F-23
<PAGE> 97

PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

11. COMMITMENTS AND CONTINGENCIES -- (CONTINUED)
Activity in stock options under the Plan was as follows:

<TABLE>
<CAPTION>
NUMBER OF
SHARES UNDER
OPTIONS PRICE PER SHARE
------------ ----------------
<S> <C> <C>
Options granted.............................. 665,625 $5.80
---------
Balance at December 31, 1994................. 665,625 $5.80
Options granted.............................. 402,875 $7.10 to $13.63
Options returned for future issuance......... (26,250) $7.10 to $ 7.30
---------
Balance at December 15, 1995................. 1,042,250 $5.80 to $13.63
=========
</TABLE>

Shares of Class A Common Stock reserved for issuance are as follows:

<TABLE>
<CAPTION>
DECEMBER 31
---------------------------
1995 1994
----------- ----------
<S> <C> <C>
Options issued to employees...................... 1,042,250 665,625
Options reserved for issuance.................... 307,750 1,258,944
Other warrants................................... 1,200,550 1,200,550
Other shares reserved for convertible
securities..................................... 26,591,779 --
----------- ----------
29,142,329 3,125,119
========== =========
</TABLE>

Lease Commitments

Total rent expense amounted to approximately $877,000, $166,000 and $84,000
for the years ended December 31, 1995, 1994 and 1993, respectively, of which
$60,000 and $20,000 was paid to an affiliate during 1995 and 1994, respectively.
At December 31, 1995, the Company is committed under the following
noncancellable operating leases:

<TABLE>
<CAPTION>
PERIOD
------------------------------------------------
<S> <C>
1996............................................ $ 1,415,000
1997............................................ 1,244,000
1998............................................ 962,000
1999............................................ 748,000
2000............................................ 585,000
Thereafter...................................... 575,000
----------
$ 5,529,000
==========
</TABLE>

12. RELATED PARTY TRANSACTIONS

In March 1994, the Company repurchased and retired 117,000 shares of the
Company's common stock owned by an employee of the Company for $900,000.
Simultaneously the funds were loaned back to the Company. The Company repaid the
loan during June 1994 along with approximately $11,000 of interest.

In February 1994 the Company borrowed $280,000 from the President of the
Company and a member of his family. During May 1994, these loans were repaid
along with approximately $2,000 of interest.

F-24
<PAGE> 98

PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

12. RELATED PARTY TRANSACTIONS -- (CONTINUED)
During September and October 1994 the Company borrowed $1,600,000 from
members of the family of the President of the Company at a rate of 1% below the
prime rate per annum. In December 1994, the loan was repaid along with interest
approximating $23,000.

The Company and McCaw/AT&T are parties to an operating agreement dated
April 28, 1994, which provides for, among other services, switch sharing
agreements with McCaw/AT&T's adjacent systems, assistance in obtaining cellular
system service and equipment discounts, assistance in evaluating potential
acquisitions and in securing financing.

13. FAIR VALUES OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used by the Company in
estimating its fair value disclosures for financial instruments:

Cash and cash equivalents: The carrying amounts reported in the
consolidated balance sheet approximate fair value.

Long-term debt: The fair value of the Senior Subordinated Discount Notes
is based on the quoted market price. The carrying amount of the Senior
Convertible Discount Notes and other long-term debt approximates their fair
value.

The carrying amounts and fair values of the Company's financial instruments
at December 31, 1995 are as follows:

<TABLE>
<CAPTION>
CARRYING AMOUNT FAIR VALUE
--------------- ------------
<S> <C> <C>
Cash and cash equivalents.................... $ 123,444,000 $123,444,000
Long-term debt:
14% Senior Subordinated Discount Notes..... 128,160,000 145,200,000
12 1/4% Senior Subordinated Discount
Notes................................... 147,925,000 158,363,000
10 3/4% Senior Convertible Discount
Notes................................... 36,991,000 36,991,000
Other long-term debt....................... 4,111,000 4,111,000
</TABLE>

14. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31
---------------------------
1995 1994
------------ -----------
<S> <C> <C>
Accounts payable................................ $ 4,307,000 $ 3,838,000
Professional fees............................... 1,327,000 556,000
Interest payable................................ 119,000 502,000
Accrued operating expenses...................... 2,929,000 1,337,000
Taxes payable................................... 988,000 422,000
Other........................................... 6,107,000 2,923,000
----------- ----------
$ 15,777,000 $ 9,578,000
=========== ==========
</TABLE>

F-25
<PAGE> 99

PRICELLULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

15. OTHER CURRENT LIABILITIES

Other current liabilities consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31
-------------------------
1995 1994
---------- ----------
<S> <C> <C>
Employment agreement settlement................... $ -- $4,250,000
Amount due for untendered CIS shares.............. 2,525,000 2,534,000
Unearned covenant not to compete.................. 1,000,000 --
Other............................................. 4,000 235,000
---------- ----------
$3,529,000 $7,019,000
========== ==========
</TABLE>

F-26
<PAGE> 100

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

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Additional Information............... 2
Incorporation of Certain Documents by
Reference.......................... 2
Prospectus Summary................... 3
Risk Factors......................... 13
The Company.......................... 17
Use of Proceeds...................... 22
Price Range of Class A Common Stock
and Dividend Policy................ 22
Capitalization....................... 23
Unaudited Pro Forma Condensed
Consolidated Financial
Statements......................... 24
Selected Financial Data.............. 37
Management's Discussion and Analysis
of Financial Condition and Results
of Operations...................... 38
Business............................. 43
Management........................... 55
Principal and Selling Stockholders... 60
Description of Capital Stock......... 64
Shares Eligible for Future Sale...... 68
Underwriting......................... 69
Legal Matters........................ 70
Experts.............................. 70
Certain Terms........................ 72
Index to Financial Statements........ F-1
</TABLE>

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

3,600,000 SHARES

PRICELLULAR CORPORATION

CLASS A COMMON STOCK
(PAR VALUE $.01 PER SHARE)

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

PRICELLULAR

---------------------------------------------
GOLDMAN, SACHS & CO.

MERRILL LYNCH & CO.
PAINEWEBBER INCORPORATED
REPRESENTATIVES OF THE UNDERWRITERS
------------------------------------------------------
------------------------------------------------------
<PAGE> 101

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCES AND DISTRIBUTION

The following is a statement of estimated expenses to be paid by the
Registrant in connection with the issuance and distribution of the securities
being registered.

<TABLE>
<S> <C>
SEC registration fee..................................................... $ 18,117
NASD filing fee.......................................................... 5,754
Printing and engraving................................................... 150,000
Legal fees............................................................... 150,000
Accountants' fees........................................................ 100,000
Blue Sky qualification fees and expenses................................. 15,000
Miscellaneous............................................................ 61,129
--------
Total.......................................................... $500,000
========
</TABLE>

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the Delaware Corporation Law provides that a Delaware
corporation may indemnify any person against expenses, judgments, fines and
settlements actually and reasonably incurred by any such person in connection
with a threatened, pending or completed action, suit or proceeding in which he
is involved by reason of the fact that he is or was director, officer, employee
or agent of such corporation, provided that (i) he acted in good faith and in a
manner reasonably believed to be in or not opposed to the best interests of the
corporation and (ii) with respect to any criminal action or proceeding, he had
no reasonable cause to believe his conduct was unlawful. If the action or suit
is by or in the name of the corporation, the corporation may indemnify any such
person against expense actually and reasonably incurred by him in connection
with the defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification may be made in
respect to any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation for negligence or misconduct in the
performance of his duty to the corporation, unless and only to the extent that
the Delaware Court of Chancery or the court in which the action or suit is
brought determines upon application that, despite the adjudication of liability
but in view of all of the circumstances of the case, such person in fairly and
reasonably entitled to indemnity for such expense as the court deems proper.

Article XI, Section 1 of the Company's By-Laws provides for indemnification
of its directors and officers to the fullest extent permitted by the Delaware
Corporation Law. In accordance with the Delaware Corporation Law, the Company's
Certificate of Incorporation, as amended, limits the personal liability of its
directors for violations of their fiduciary duty. The Certificate of
Incorporation eliminates each director's liability to the Company or its
stockholders for monetary damages except (i) for any breach of the director's
duty of loyalty to the Company or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under the section of the Delaware law providing for liability of
directors for unlawful payment of dividends or unlawful stock purchases or
redemptions, or (iv) for any transaction from which a director derived any
improper personal benefit. The effect of this provision is to eliminate the
personal liability of directors for monetary damages for actions involving a
breach of their fiduciary duty of care, including any such actions involving
gross negligence. This provision will not, however, limit in any way the
liability of directors for violations of the Federal securities laws. The
Company has entered into indemnification agreements with each of its directors
and officers to indemnify them to the maximum extent permitted by Delaware law.

II-1
<PAGE> 102

The form of Underwriting Agreement, filed as Exhibit 1 hereto, provides for
the indemnification of the Company, its control persons, its directors and
certain of its officers by the Underwriters against certain liabilities,
including liabilities under the Securities Act.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits.

See Index to Exhibits at E-1.

(b) Financial Statement Schedules.

See Index to Financial Statement Schedules (page S-1).

All other schedules have been omitted because the information is not
applicable or is not material or because the information required is set forth
in the financial statements or the notes thereto.

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes:

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

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

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

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

II-2
<PAGE> 103

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF NEW
YORK, NEW YORK, ON THE 7TH DAY OF JUNE 1996.

PRICELLULAR CORPORATION

By: /s/ ROBERT PRICE

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

Robert Price

President

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ ROBERT PRICE Director and President (Principal June 7, 1996
- ------------------------------------- Executive Officer)
Robert Price
* Vice President, Chief Financial June 7, 1996
- ------------------------------------- Officer and Treasurer (Principal
Stuart B. Rosenstein Financial and Accounting
Officer)
* Director, Vice President, and June 7, 1996
- ------------------------------------- Secretary
Kim I. Pressman
Director June 7, 1996
- -------------------------------------
Brion B. Applegate
* Director June 7, 1996
- -------------------------------------
Tim R. Palmer
Director June 7, 1996
- -------------------------------------
Scott Sperling
*By /s/ Robert Price
---------------------------------
Robert Price
Attorney-in-Fact
</TABLE>

II-3
<PAGE> 104

INDEX TO FINANCIAL STATEMENT SCHEDULES

<TABLE>
<CAPTION>
PAGE
<S> <C>
Report of Independent Auditors....................................................... S-2
Schedule I Condensed Financial Information of Registrant............................. S-3
Schedule II Valuation and Qualifying Accounts........................................ S-7
</TABLE>

All other schedules are omitted because they are inapplicable, not required
or the information is included elsewhere in the Consolidated Financial
Statements or the notes thereto.

S-1
<PAGE> 105

REPORT OF INDEPENDENT AUDITORS

Board of Directors
PriCellular Corporation

We have audited the consolidated financial statements of PriCellular
Corporation and subsidiaries as of December 31, 1995 and 1994, and have issued
our report thereon dated January 24, 1996, included elsewhere in this
Registration Statement. Our audits also included the financial statement
schedules listed in Item 16(b) of this Registration Statement. These schedules
are the responsibility of the Company's management. Our responsibility is to
express an opinion based on our audits.

In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.

Ernst & Young LLP

New York, New York
January 24, 1996

S-2
<PAGE> 106

PRICELLULAR CORPORATION

SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT

CONDENSED BALANCE SHEETS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31
--------------------
1995 1994
-------- -------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents........................................... $ 96,776 $ 6,730
Other current assets................................................ 4,140 --
-------- -------
Total current assets.................................................. 100,916 6,730
Investment in and advances to subsidiaries............................ 120,373 71,577
Other assets.......................................................... 21,822 --
-------- -------
Total assets.......................................................... $243,111 $78,307
======== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable, accrued expenses and other current liabilities.... $ 392 $ 71
Long-term debt........................................................ 36,991 --
Stockholders' equity.................................................. 205,728 78,236
-------- -------
Total liabilities and stockholders' equity............................ $243,111 $78,307
======== =======
</TABLE>

See accompanying notes.

S-3
<PAGE> 107

PRICELLULAR CORPORATION

SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT -- (CONTINUED)

CONDENSED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
COSTS AND EXPENSES
General and administrative................................ $ 293 $ 214 $ --
Depreciation and amortization............................. 58 -- --
------- ------- -------
351 214 --
------- ------- -------
Operating loss.................................... (351) (214) --
OTHER INCOME (EXPENSE)
Interest expense, net..................................... (266) 9 --
Other income (expense), net............................... -- -- --
------- ------- -------
(266) 9 --
------- ------- -------
Loss before equity in net income (loss) of
subsidiaries.................................... (617) (205) --
Equity in net income (loss) of subsidiaries............... (7,094) (1,235) 10,616
------- ------- -------
Net income (loss)................................. $(7,711) $(1,440) $10,616
======= ======= =======
</TABLE>

See accompanying notes.

S-4
<PAGE> 108

PRICELLULAR CORPORATION

SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT -- (CONTINUED)

CONDENSED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------------------
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES..... $ 720 $ (796) $ --
INVESTING ACTIVITIES
Investment in and advances to (distribution from)
subsidiaries....................................... (31,149) (59,127) 18,117
Amounts deposited in escrow to bid in PCS auction..... (4,140) -- --
Junior Subordinated Note Receivable from subsidiary... (20,000) -- --
-------- -------- --------
Net cash (used in) provided by investing
activities.................................. (55,289) (59,127) 18,117
-------- -------- --------
FINANCING ACTIVITIES
Proceeds from sale of common stock.................... 31,633 34,697 --
Proceeds from issuance of Senior Subordinated
Convertible Discount Note.......................... 35,607 -- --
Proceeds from issuance of preferred stock............. 79,599 -- --
Proceeds from note payable............................ -- -- --
Proceeds from capital contributions................... -- 32,856 --
Proceeds from due to stockholders..................... -- 2,380 --
Repayment of due to stockholders...................... -- (2,380) --
Payments for deferred financing costs................. (1,455) -- --
Purchase and retirement of common stock............... (770) (900) (18,117)
-------- -------- --------
Net cash provided by (used in) financing
activities.................................. 144,614 66,653 (18,117)
-------- -------- --------
Increase (decrease) in cash and cash equivalents...... 90,045 6,730 --
Cash and cash equivalents at beginning of year........ 6,730 -- --
-------- -------- --------
Cash and cash equivalents at end of year.............. $ 96,775 $ 6,730 $ --
======== ======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest........................................... $ -- $ -- $ --
Income taxes....................................... -- -- --
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES
Capital contribution of investment in cellular
operations......................................... -- 8,155 --
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES
Conversion of Class B Common Stock To Class A Common
Stock.............................................. 8 -- --
Debt cancelled in exchange for capital
contributions...................................... -- 2,791 --
Shares issued in connection with the acquisition of
cellular systems................................... 24,741 -- --
</TABLE>

See accompanying notes.

S-5
<PAGE> 109

PRICELLULAR CORPORATION

SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT -- (CONTINUED)

NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1995

1. BASIS OF PRESENTATION

In the parent company-only financial statements, the Company's investment
in subsidiaries is stated at cost plus equity in undistributed earnings of
subsidiaries since the date of acquisition. The Company's share of net income or
(loss) of its unconsolidated subsidiaries is included in consolidated income or
(loss) using the equity method. The parent company-only financial statements
should be read in conjunction with the Company's consolidated financial
statements.

2. LONG-TERM DEBT

On August 21, 1995, the Company issued approximately $60,000,000 aggregate
principal amount of 10 3/4% Senior Subordinated Convertible Discount Notes due
2004. The notes were issued at a price of 59.345% or $35,607,000. The original
issue discount on the notes accretes at a rate of 10 3/4%, compounded
semiannually, to an aggregate principal amount of approximately $60,000,000 by
August 15, 2000. Interest will thereafter accrue at 10 3/4% per annum, payable
semiannually beginning February 15, 2001. The notes are convertible into the
Company's Class A Common Stock at a conversion price of $15.53 per share. The
Company can force conversion of the notes under certain circumstances if the
Company's Class A Common Stock trades at $21.73 per share for ten out of fifteen
consecutive trading days.

There are no maturities of long-term debt until 2004 at which time the
entire note becomes due.

S-6
<PAGE> 110

PRICELLULAR CORPORATION

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
ADDITIONS ADDITIONS
BALANCE AT CHARGED TO CHARGED TO
BEGINNING OF COST AND OTHER BALANCE AT
DESCRIPTION (000'S) YEAR EXPENSES ACCOUNTS DEDUCTIONS END OF YEAR
- ---------------------------- ------------ ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1993
Allowance for doubtful
accounts............... $ 205 $ -- $ -- $ 205(A) $ --
=== ==== ==== ===== ====
Valuation allowance for
deferred income
taxes.................. $ -- $ 910 $ -- $ -- $ 910
=== ==== ==== ===== ====
YEAR ENDED DECEMBER 31, 1994
Allowance for doubtful
accounts............... $ -- $ 99 $ 636(B) $ -- $ 735
=== ==== ==== ===== ====
Valuation allowance for
deferred income
taxes.................. $ 910 $ 628 $ -- $ -- $ 1,538
=== ==== ==== ===== ====
YEAR ENDED DECEMBER 31, 1995
Allowance for doubtful
accounts............... $ 735 $ 936 $ 1,982(B) $ (1,577) $ 2,076
=== ==== ==== ===== ====
Valuation allowance for
deferred income
taxes.................. $1,538 $ 7,151 $ -- $ -- $ 8,689
=== ==== ==== ===== ====
</TABLE>

- ---------------
(A) Results from the sale of the Company's 49.5% interest in Wichita Falls
Celltelco Partnership.

(B) Results from the acquisition of cellular systems.

S-7
<PAGE> 111

EXHIBIT INDEX

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
- ------- ----------------------------------------------------------------------- ------------
<C> <S> <C>
1.1 Form of Underwriting Agreement(5)
2.1 Form of Purchase and Sale Agreement relating to the CIS Acquisition(1)
2.2 Agreement of Purchase and Sale by and between David L. Block and the
Company dated as of October 28, 1994(1)
2.3 Asset Exchange Agreement, dated October 19, 1994, between C.I.S. of
Pine Bluff, Inc., Century Cellunet of Minnesota and the Company (the
MN-6/Pine Bluff Asset Exchange Agreement) (certain exhibits and
schedules have been omitted but will be furnished supplementally to the
Commission upon request)(1)
2.4 Asset Purchase Agreement, dated as of February 16, 1994, by and between
the Company and Chico MSA Cellular, Inc., McCaw Cellular
Communications, Inc. and Louisiana 8 Corporation(1)
2.5 Purchase Agreement, dated as of December 17, 1994, among The Buckhead
Telephone Company, Gilro Cellular Corporation and the Company(2)
2.6 Agreement, dated as of January 26, 1995, by and among CIS and KETS
Partnership(2)
2.7 Asset Purchase Agreement by and among the Company, Northland Cellular
Corporation, Dominion Cellular, Inc. and Dominion Resources, Inc.,
dated as of May 8, 1995 (certain exhibits and schedules have been
omitted but will be furnished supplementally to the Commission upon
request)(4)
2.8 Contribution Agreement by and among Texas/Illinois Cellular Limited
Partnership, a Delaware limited partnership, Southwestern Bell Mobile
Systems, Inc., a Delaware and Virginia corporation, the Company,
Cellular Information Systems of Laredo, Inc., a Texas corporation,
dated as of April 10, 1995 (certain schedules have been omitted but
will be furnished supplementally to the Commission upon request)(4)
2.9 Acquisition Agreement, dated as of July 31, 1995, by and among Cellular
of Upstate New York, Inc., Alexandra Cellular Corporation, the Company
and the Company's wholly-owned subsidiary, PriCellular Wireless
Corporation ("Wireless") (certain exhibits and schedules have been
omitted but will be furnished supplementally to the Commission upon
request)(4)
</TABLE>

<TABLE>
<C> <S> <C>
2.10 Asset Purchase Agreement dated as of September 27, 1995 by and among
Seven Cellular Corporation, Wireless, USCOC of Ohio RSA #7, Inc. and
United States Cellular Corporation (certain exhibits and schedules have
been omitted but will be furnished supplementally to the Commission
upon request)(3)
2.11 Acquisition Agreement dated as of June 28, 1995 by and among Great Seal
Cellular Limited Partnership, the Company and Chill Cellular
Corporation (certain exhibits and schedules have been omitted but will
be furnished supplementally to the Commission upon request)(4)
2.12 Acquisition Agreement dated as of September 29, 1995 by and among
Cellular-10, Inc., the shareholders listed therein, Wireless and Ohio
River Cellular Corporation (certain exhibits and schedules have been
omitted but will be furnished supplementally to the Commission upon
request)(3)
</TABLE>

E-1
<PAGE> 112

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
- ------- ----------------------------------------------------------------------- ------------
<C> <S> <C>
2.13 Agreement for Purchase of Stock by and among the Company, Eastern
Wireless Cellular Corporation and AT&T Wireless Services, Inc., dated
September 20, 1995 (certain exhibits and schedules have been omitted
but will be furnished supplementally to the Commission upon request)(3)
2.14 Letter Agreement dated June 27, 1995 between the Company and USCOC of
West Virginia RSA #2, Inc.(4)
5.1 Opinion of Davis Polk & Wardwell regarding the validity of the
securities being registered.(6)
23.1 Consent of Ernst & Young LLP relating to the financial statements of
the Company(5)
23.2 Consent of Ernst & Young LLP relating to the financial statements of
Illinois RSA 4 and 6(5)
23.3 Consent of Coopers & Lybrand L.L.P. relating to the financial
statements of Cellular Information Systems, Inc.(5)
23.4 Consent of KPMG Peat Marwick LLP relating to the financial statements
of Century Cellunet of Minnesota RSA #6(5)
23.5 Consent of Breazeale, Saunders & O'Neil, Ltd. relating to the financial
statements of Cellular 10, Inc.(5)
23.6 Consent of Arthur Andersen LLP relating to the financial statements of
Great Seal Cellular Limited Partnership(5)
23.7 Consent of Eliot H. Goldberg relating to the financial statements of
Dominion Cellular Inc.(5)
23.8 Consent of Arthur Andersen LLP relating to the financial statements of
Parkersburg Cellular Telephone Company, Inc.(5)
23.9 Consent of Arthur Andersen LLP relating to the financial statements of
USCOC of Ohio RSA #7(5)
23.10 Consent of Coopers & Lybrand L.L.P. relating to the financial
statements of Cellular of Upstate New York, Inc.(5)
23.11 Consent of Arthur Andersen LLP relating to the financial statements of
Hudson Cellular Limited Partnership(5)
23.12 Consent of Arthur Andersen LLP relating to the financial statements of
PA Rural Service Area No. 9 Limited Partnership(5)
23.13 Consent of Arthur Andersen LLP relating to the financial statements of
Dutchess County Cellular Telephone Company(5)
</TABLE>

- ---------------
(1) Incorporated herein by reference to the Company's Registration Statement on
Form S-1, No. 33-85678.

(2) Incorporated herein by reference to the Registration Statement on Form S-4,
No. 33-88350 filed by the Company's wholly-owned subsidiary, Wireless.

(3) Incorporated herein by reference to the Company's Registration Statement on
Form S-1 No. 33-98156.

(4) Incorporated herein by reference to Wireless's Registration Statement on
Form S-1, No. 33-95834.

(5) Previously filed.

(6) To be filed by amendment.

E-2