NEW YORK-PriCellular Corp. and Southwestern Bell Mobile Systems Inc. have formed a joint venture in which PriCellular will contribute its cellular properties in the Laredo, Texas, metropolitan statistical area and Southwestern Bell will contribute its properties in Illinois 4 and 6 rural service areas.
Under the agreement, PriCellular said it will receive payments during a four- year-period rising from $3.3 million to $5.8 million in the last year. It will have an option to remain in the joint venture at the end of that period or sell the property to Southwestern Bell at prices beginning at $28.5 million and escalating to $39 million at the end of the four years.
PriCellular said it will own 44.5 percent of the combined 566,000 population base, or 252,000 net pops. Southwestern Bell will have operating control of the properties.
“This venture with Southwestern Bell will best serve the cellular subscribers in both the Laredo MSA and the Illinois RSAs,” said PriCellular President Robert Price. “We believe that the cellular skills of SBC will enhance the performance in the areas covered by the joint venture and we have an attractive exit strategy if we desire. The additional “pops” brings us above the 2 million pop mark and sets our next corporate hurdle at the 2.5 million mark, which we hope to achieve in 1995.”
PriCellular said it operates 15 other MSA and RSA licenses including an approximately 60,000-square-mile cluster in northern Michigan, Minnesota and Wisconsin.
