Cellular Communications of Puerto Rico announces operating results for second quarter 1996.

NEW YORK--(BUSINESS WIRE)--Aug. 14, 1996--CELLULAR COMMUNICATIONS OF PUERTO RICO, INC. ("CCPR") (Nasdaq: CCPR) announced today its operating results for the three and six months ended June 30, 1996. -0-

                                    Three Months Ended June 30
                                       1996            1995
                                 (In thousands, except subscribers
                                         and per share data)

Revenues:
  Service                          $ 28,552         $ 22,271
  Equipment, net                       (996)          (1,510)
                                     27,556           20,761
Expenses:
  Operating                           4,139            2,323
  SG&A                               16,554           12,951
                                     20,693           15,274
Operating income                      6,863            5,487

Depreciation and amortization        (4,743)          (3,996)
Interest and other, net              (1,607)          (2,306)
Provision for income taxes             (761)          (1,788)
Net income (loss)                 $   ( 248)      $   (2,603)

Net income (loss) per
 common share                    $    ( .02)    $       (.26)

Weighted average shares              13,292            9,921

Ending subscribers                  138,700           98,000

                                     Six Months Ended June 30
                                       1996            1995
                                 (In thousands, except subscribers
                                        and per share data)

Revenues:
  Service                          $ 57,065         $ 41,760
  Equipment, net                     (2,713)          (3,459)
                                     54,352           38,301
Expenses:
  Operating                           8,024            4,512
  SG&A                               30,201           23,714
                                     38,225           28,226
Operating income                     16,127           10,075

Depreciation and amortization        (9,273)          (7,310)
Interest and other, net              (3,326)          (4,293)
Provision for income taxes           (2,487)          (2,324)
Net income (loss)                  $  1,041         $ (3,852)

Net income (loss) per common share$     .07       $     (.39)

Weighted average shares              14,118            9,964

Ending subscribers                  138,700           98,000

Although EBITDA (earnings before interest, taxes, depreciation and amortization) increased materially year over year, it declined to $6,863,000 in the second quarter of 1996 from $9,264,000 in the first quarter of 1996 primarily because of an increase in general and administrative expenses and less than anticipated growth in revenues as detailed below.

General and administrative expenses increased more rapidly than anticipated from the first to the second quarters. Large components of the increase were due to certain overhead expenses related to corporate allocations as well as legal and public relations activities. Management believes that general and administrative expenses in the second half should be in line with those of the first half.

The shortfall in revenue growth was attributable to three factors:

1) Revenue per subscriber declined at a greater than anticipated rate, which in part may stem from the recently resolved uncertainty concerning the status of section 936 of the US tax code in conjunction with the gubernatorial election process.

2) Because the U.S. Virgin Islands ("USVI") now represents approximately 9% of the Company's service revenues (three times the percentage of revenues one year ago), the normal, but large, seasonal decline in USVI usage and average revenues (which was accentuated by the rapid reinstatement of the landline telephone system in the USVI since Hurricane Marilyn) has a greater impact on the Company as a whole.

3) In order to improve customer retention, the Company is embracing a process whereby subscribers may change their subscriptions to rate plans which are more effective for their normal usage patterns (in return for a nominal charge and an extended contract). This normally results in a higher retention rate and a slightly lower level of average revenues.

In May 1996, CCPR announced that it was evaluating strategic alternatives, which may include the exploration of partnering opportunities, an appropriate acquisition, the sale of the Company or similiar transactions. At this time, the Company is engaged in discussions with certain entities regarding these alternatives. To date, no decision has been made to pursue any particular alternative and there can be no assurance that any transaction will result from these discussions. -0-

Discussion of Second Quarter Results

Service revenues increased to $28,552,000 from $22,271,000 as a result of subscriber growth that increased the Company's current revenue stream. Average monthly revenue per subscriber for the second quarter decreased to $71 in 1996 from $81 in 1995.

The loss from equipment, before depreciation of rental equipment, decreased to $996,000 from $1,510,000 primarily because of reductions in the cost of cellular telephones, offset by an increase in the loss from pager sales. The Company sells cellular telephones and pagers below cost in response to competition and to generate subscriber growth.

Operating expenses increased to $4,139,000 from $2,323,000 primarily due to increased usage of the network and additional costs associated with the expanded network (including paging operations).

Selling, general and administrative expenses increased to $16,554,000 from $12,951,000 as a result of increased selling and marketing to increase the customer base and additional personnel to service the expanding customer base. Increases in bad debt expense, customer retention expense and subscriber billing expense also contributed to this increase.

Depreciation and amortization expense increased to $4,743,000 from $3,996,000 primarily because of increases in property, plant and equipment.

Interest and other, net, decreased to expense of $1,607,000 from expense of $2,306,000 primarily because of reductions in the principal balance and interest rates on the Company's debt.

Paging operations commenced in the second quarter of 1995. As of June 30, 1996, there were 21,700 pagers in use.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Except for the historical information presented, the matters discussed in this release may include forward-looking statements. They represent CCPR's reasonable judgment on the future and are subject to risks and uncertainties that could cause actual results to differ materially. Such factors include: a change in economic conditions in the various geographic areas served by CCPR's operations which would adversely affect the level of demand for its services; greater-than-anticipated competitive activity; and the impact of new business opportunities. These and other factors related to the business are described in CCPR's Annual Report on Form 10-K.

CONTACT: Cellular Communications of Puerto Rico Inc., New York

J. Barclay Knapp, President and Chief Operating Officer,

Stanton N. Williams, Director-Corporate Development

or Richard J. Lubasch, Senior Vice President-General Counsel,

212/355-3466