<PAGE>   1



                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                   FORM 10-K

                Annual Report Pursuant to Section 13 or 15(d) of
                      the Securities Exchange Act of 1934

<TABLE>
<S>                                                         <C>
For the year ended December 31, 1996                        Commission file number 0-25588
</TABLE>

                             PALMER WIRELESS, INC.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                             <C>
            DELAWARE                                         65-0456627
(State or other jurisdiction of                 (I.R.S. Employer Identification No.)
 incorporation or organization)

     12800 UNIVERSITY DRIVE                                    33907
      FORT MYERS, FLORIDA                                    (Zip Code)
 (Address of principal executive offices)
</TABLE>

                                 (941) 433-4350
               Registrant's telephone number, including area code
          Securities registered pursuant to Section 12(b) of the Act:


CLASS A COMMON STOCK                         THE NASDAQ STOCK MARKET
 (Title of Class)                 (Name of each exchange on which registered)


          Securities registered pursuant to Section 12(g) of the Act:
                                (Not applicable)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes   X    No
                                               -----     -----

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.  [ ]

Based upon the closing price of the registrant's common stock as of March 27,
1997 the aggregate market value of the common stock held by non-affiliates of
the registrant is $74,790,506 million.*

The number of shares of Class A Common Stock outstanding as of March 27, 1997
was 10,519,681.  The number of shares of Class B Common Stock outstanding as of
March 27, 1997 was 17,293,578.

                      DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the registrant's Annual Report to Shareholders for the year ended
December 31, 1996 are incorporated by reference into Part II hereof.  Portions
of the registrant's Proxy Statement for the 1997 Annual Meeting of Shareholders
are incorporated by reference into Part III hereof.

-------------------
*   Solely for purposes of this calculation, all executive officers and
    directors of the registrant and all shareholders reporting beneficial
    ownership of more than 5% of the registrant's common stock are considered to
    be affiliates.

<PAGE>   2
                                     PART I

ITEM 1.   BUSINESS GENERAL

         Palmer Wireless, Inc. (the "Company") is engaged in the construction,
development, management and operation of cellular telephone systems in the
southeastern United States.  (References to the Company also include its
subsidiaries and its predecessor, the Partnership (defined below) and its
subsidiaries, or any of them.)  At December 31, 1996, the Company provided
cellular telephone service to 279,816 subscribers in Florida, Georgia, Alabama
and South Carolina in a total of 17 licensed service areas composed of nine
Metropolitan Statistical Areas ("MSAs") and eight Rural Service Areas ("RSAs"),
with an aggregate estimated population of 3.8 million.  The Company sells its
cellular telephone service as well as a full line of cellular products and
accessories principally through its network of retail stores.  The Company
markets all of its products and services under the nationally-recognized
service mark CELLULAR ONE.

         The Company has developed its business through the acquisition and
integration of cellular telephone systems, clustering multiple systems in three
market areas in order to provide broad areas of uninterrupted service and
achieve certain economies of scale, including centralized marketing and
administrative functions as well as multi-system capital expenditures.  The
Company devotes considerable attention to engineering, maintenance and
improvement of its cellular telephone systems in an effort to deliver
high-quality service to its subscribers and to implement new technologies as
soon as economically practicable.  Through its participation in the North
American Cellular Network ("NACN"), the Company is able to offer seven-digit
dialing access to its subscribers when they travel outside the Company's
service areas, providing them with convenient roaming access throughout large
areas of the United States, Canada, Mexico and Puerto Rico served by other NACN
participants.  By marketing its products and services under the CELLULAR ONE
name, the Company also enjoys the benefits of association with a nationally
recognized service mark.

BACKGROUND

         The Company's business was started by the Palmer family, which has
been in the broadcast business in Iowa since 1922.  Palmer Communications
Incorporated ("PCI"), the Company's parent, owned NBC affiliate television
stations in Des Moines, Iowa and Oklahoma City, Oklahoma, together with radio
stations located in Des Moines, Iowa, Cedar Rapids, Iowa and Naples, Florida.
In 1996 and 1997, PCI sold these broadcast operations.   PCI currently conducts
certain specialized mobile radio ("SMR") operations in Florida and Alabama.
PCI was also active in the cable television industry for over 25 years,
substantially exiting the industry in 1992.

         PCI entered the cellular telephone business in 1987, when it
constructed a cellular telephone system for the Fort Myers, Florida MSA.  PCI
acquired control of this system in March 1988 and rapidly expanded its cellular
telephone holdings, acquiring control of the non-wireline cellular licenses for
the Columbus and Albany, Georgia and Dothan and Montgomery, Alabama MSAs in
1988.  These acquisitions created the nucleus for the development of a regional
cellular telephone company serving central and southern Georgia and Alabama.
During 1989, PCI transferred its cellular properties to Palmer Cellular
Partnership (the "Partnership"), a newly organized general partnership that was
formed to manage and operate all of PCI's cellular telephone operations.  PCI
was the managing partner of the Partnership.  The Partnership continued the
growth strategy of PCI and enhanced the Company's regional cellular cluster in
1989 by acquiring control of the cellular license for the Macon, Georgia MSA.

         In 1991, the Company acquired control of the non-wireline cellular
license for the Panama City, Florida MSA.  In 1992 and 1993, the Company
acquired two non-wireline cellular licenses for RSAs contiguous to the
Company's MSAs in Georgia and Alabama: the Georgia-9 RSA in June 1992





<PAGE>   3
and the Alabama-8 RSA in April 1993.  The Georgia-9 RSA acquisition added the
geographic territory between the Columbus, Macon and Albany, Georgia MSAs to
the Company's service area coverage.  The Alabama-8 RSA expanded the Company's
service areas around three MSAs served by the Company, covering a substantial
portion of the geographic territory between the Montgomery, Alabama, Columbus,
Georgia and Dothan, Alabama MSAs and the Georgia-9 RSA.  In 1993, the Company
also increased its majority position in its MSAs in Albany, Georgia and in
Dothan and Montgomery, Alabama, through the purchase of certain minority
interests for an aggregate purchase price of $2.9 million.

         During 1994, the Company continued to acquire minority interests in
six of its MSAs for an aggregate purchase price of $3.1 million.  Also, on
October 31, 1994, the Company acquired the cellular telephone systems of
Southeast Georgia Cellular Limited Partnership ("SGC") and Georgia 12 Cellular
Limited Partnership ("Georgia 12" and together with SGC, the "Georgia
Partnerships") for an aggregate purchase price of $91.7 million (the "Georgia
Acquisition").  The assets acquired by the Company from SGC included the
non-wireline cellular telephone systems located in Georgia RSA Market Nos. 377,
378 and 380, otherwise known as Georgia-7 RSA, Georgia-8 RSA and Georgia-10
RSA.  The assets acquired by the Company from Georgia 12 included the
non-wireline cellular telephone system located in Georgia RSA Market No. 382,
otherwise known as Georgia-12 RSA.  The cellular telephone systems in the
acquired RSAs serve a geographic territory in southeast Georgia that is
adjacent to the Company's Georgia-9 RSA and Macon, Georgia MSA.

         In December 1995, the Company acquired interests in cellular telephone
systems by purchasing Georgia Metronet, Inc. ("GMI") and Augusta Metronet, Inc.
("AMI" and together with GMI, the "GTE Companies") for an aggregate purchase
price of $158.4 million (the "GTE Acquisition").  The assets acquired by the
Company in the GTE Acquisition included the non-wireline cellular telephone
system located in Georgia MSA Market Nos. 155 and 108, otherwise known as
Savannah MSA and Augusta MSA, respectively. The cellular telephone systems in
the newly-acquired MSAs serve a geographic territory in eastern Georgia and a
portion of South Carolina that is adjacent to the Company's existing markets in
the Georgia-8 RSA and Georgia-12 RSA.  In addition, the Company also acquired
the interim authority to provide cellular service to the southern portions of
South Carolina RSA Market Nos. 631 and 632, otherwise known as South Carolina-7
RSA and South Carolina-8 RSA, respectively, which serve a geographic territory
that is adjacent to the Company's existing markets in the Georgia-8 RSA as well
as the Savannah, Georgia MSA and the Augusta, Georgia MSA.  In addition, during
1995, the Company acquired additional minority interests in six of its MSAs for
an aggregate purchase price of $2.0 million.

         On June 20, 1996, the Company acquired the cellular telephone system
of USCOC of Georgia RSA #1, Inc. ("USCOC") for an aggregate purchase price of
$31.6 million.  The assets acquired by the Company from USCOC included the
cellular telephone system in the Georgia-1 RSA Market No. 371, otherwise known
as Georgia-1 RSA.  The cellular telephone system in the acquired RSA serves a
geographic territory of northwest Georgia between Chattanooga and Atlanta.

         On July 5, 1996, two of the Company's majority-owned subsidiaries
acquired the cellular telephone system of Horizon Cellular Telephone Company of
Spalding, L.P.  ("Horizon") for an aggregate purchase price of $36.0 million.
The assets acquired by the Company from Horizon include the cellular telephone
system in the Georgia-6 RSA Market No. 376, otherwise known as Georgia-6 RSA.
The cellular telephone system in the acquired RSA serves a geographic territory
of west central Georgia adjacent to the Company's Macon and Columbus, Georgia
MSAs.

         Prior to March 1995, the Company's operations were conducted by the
Partnership.  Contemporaneously with the Company's initial public offering
("IPO") in March 1995, the Partnership's operations, assets and liabilities and
certain other assets were transferred to the Company.  Prior to that transfer,
the Company had no operations and had no material assets or liabilities other
than $1.6 million in connection with deferred expenses incurred before the IPO.





                                     - 2 -
<PAGE>   4
RECENT DEVELOPMENTS

         On February 1, 1997, a majority-owned subsidiary of the Company
acquired the cellular telephone system serving the Georgia-13 RSA Market No.
383 ("Georgia-13 RSA") from Mobile Communications Systems L.P. for a total
purchase price of $30.0 million, subject to certain adjustments.  The cellular
telephone system in the acquired RSA serves a geographic territory of southwest
Georgia adjacent to the Company's Albany, Georgia and Dothan, Alabama MSAs.

MARKETS AND SYSTEMS

         The Company's cellular telephone systems serve three distinct markets.
The largest of these markets includes 15 contiguous licensed service areas in
Georgia, Alabama and South Carolina.  The Company also has cellular service
areas in Fort Myers, Florida and Panama City, Florida.  The following table
sets forth as of December 31, 1996, with respect to each service area in which
the Company owns a cellular telephone system, the estimated population, the
Company's beneficial ownership percentage, the Net Pops (as defined below) and
the date of initial operation of such system by the Company or a predecessor
operator.  Any reference to "Net Pops" is to the estimated population with
respect to a given cellular service area multiplied by the percentage interest
that the Company owns in the entity licensed in such cellular service area.


<TABLE>
<CAPTION>
                                                ESTIMATED             OWNERSHIP                                DATE SYSTEM
SERVICE AREA(1)                               POPULATION(2)           PERCENTAGE               NET POPS        OPERATIONAL
---------------                               -------------           ----------               --------        -----------
<S>                                             <C>                       <C>                <C>                   <C>
Georgia/Alabama
    Albany, GA    . . . . . . . . . . .           118,156                  82.7%                97,726              4/88
    Augusta, GA   . . . . . . . . . . .           438,857                 100.0                438,857              4/87
    Columbus, GA  . . . . . . . . . . .           251,568                  84.9                213,480             11/88
    Macon, GA     . . . . . . . . . . .           313,240                  99.1                310,277             12/88
    Savannah, GA  . . . . . . . . . . .           283,465                  98.5                279,172              3/88
    Georgia-1 RSA . . . . . . . . . . .           223,935                 100.0                223,935             10/92
    Georgia-6 RSA . . . . . . . . . . .           199,675                  94.8                189,369              4/93
    Georgia-7 RSA . . . . . . . . . . .           134,325                 100.0                134,325             10/91
    Georgia-8 RSA . . . . . . . . . . .           157,272                 100.0                157,272             10/91
    Georgia-9 RSA . . . . . . . . . . .           119,253                 100.0                119,253              9/92
    Georgia-10 RSA  . . . . . . . . . .           149,712                 100.0                149,712             10/91
    Georgia-12 RSA  . . . . . . . . . .           209,668                 100.0                209,668             10/91
    Dothan, AL    . . . . . . . . . . .           134,771                  92.3                124,434              2/89
    Montgomery, AL  . . . . . . . . . .           319,305                  91.9                293,421              8/88
    Alabama-8 RSA . . . . . . . . . . .           173,167                 100.0                173,167              7/93
                                                ---------                                    ---------
            Subtotal  . . . . . . . . .         3,226,369                                    3,114,068
Fort Myers, FL    . . . . . . . . . . .           382,962                  99.0                379,132              8/87
Panama City, FL   . . . . . . . . . . .           145,711                  77.9                113,525              9/88
                                                ---------                                    ---------
                 Total  . . . . . . . .         3,755,042                                    3,606,725
                                                =========                                    =========
</TABLE>

-----------
(1)  Does not include South Carolina-7 RSA and South Carolina-8 RSA where the
     Company has interim operating authority as a result of the GTE
     Acquisition.  The Company has no subscribers in South Carolina-7 RSA and
     South Carolina-8 RSA, but instead provides roaming access to its own
     subscribers and others when they travel in these two service areas,
     utilizing its existing cell sites.  Does not include Alabama-5 RSA where
     the Company has interim operating authority.

(2)  Based on population estimates for 1996 from The Sourcebook of County
     Demographics, Ninth Edition, 1996, published by CACI Marketing Services
     (the "CACI Sourcebook"), which estimates are calculated based on the 1990
     Census and U.S. Bureau of Census Current Population Reports.





                                     - 3 -
<PAGE>   5
  GEORGIA/ALABAMA

         In 1988, the Company acquired controlling interests in the licenses to
operate cellular telephone systems in the four MSAs (Montgomery and Dothan,
Alabama and Columbus and Albany, Georgia) that make up the core of its
Georgia/Alabama cluster.  The Company continued to increase its presence in
this market by acquiring additional cellular service areas in 1989 (Macon,
Georgia MSA), 1992 (Georgia-9 RSA), 1993 (Alabama-8 RSA), 1994 (Georgia-7 RSA,
Georgia-8 RSA, Georgia-10 RSA and Georgia-12 RSA), 1995 (Savannah, Georgia MSA
and Augusta, Georgia MSA) and 1996 (Georgia-1 RSA and Georgia-6 RSA).  The
Augusta, Georgia MSA includes Aiken County in South Carolina.  In 1994, the
Company also received interim operating authority from the FCC to provide
service in two counties within the southern portion of the Alabama-5 RSA.  In
1995, as a result of the GTE Acquisition, the Company received interim
operating authority from the FCC to provide service to South Carolina-7 RSA and
South Carolina-8 RSA.  In the aggregate, this market (excluding the Alabama-5
RSA, South Carolina-7 RSA and South Carolina-8 RSA where the Company has only
interim operating authority) now covers a contiguous service area of
approximately 38,000 square miles that includes Montgomery, the state capital
of Alabama, prominent resort destinations in Jekyll Island, St. Simons Island
and Sea Island, Georgia, and over 710 miles of interstate highway, including
most of I-95 from Savannah, Georgia to Jacksonville, Florida.  The Company
collects substantial roaming revenue from cellular telephone subscribers from
other systems traveling in this market from nearby population centers such as
Atlanta and Birmingham, as well as from vacation and business traffic in the
southeastern United States.  Due in part to the favorable labor environment,
moderate weather and relatively low cost of land, during the last several years
there has been an influx of new manufacturing plants in this market.  As of
December 31, 1996, the Company utilized 181 cell sites in this cluster
(including three cell sites in Alabama-5 RSA), 23 of which were constructed by
the Company in 1995 and 43 of which were placed in service in 1996.  The
Company plans to further improve signal coverage and increase system capacity
in this cluster by adding 63 more cell sites in 1997 in addition to the 8 cell
sites acquired with Georgia-13 RSA..

  FORT MYERS

         The Company acquired control of the non-wireline cellular telephone
system for the Fort Myers, Florida market in 1988.  The Fort Myers market is a
significant resort center, attracting both vacation and business travelers on a
year-round basis.  This market also benefits from the growth and popularity of
other cities in southwest Florida, such as Naples and Sarasota.  In addition,
the Fort Myers airport is a designated international port of entry.  The
Company collects substantial roaming revenue in this market from subscribers
from other systems who visit Fort Myers.  As of December 31, 1996, the Company
utilized 23 cell sites in this market, three of which were added in 1995, and
five of which were added in 1996.  The Company plans to further improve signal
coverage and increase capacity in this market by adding five more cell sites in
1997.

  PANAMA CITY

         The Company acquired control of the non-wireline cellular license for
the Panama City, Florida market in 1991.  The Company collects substantial
roaming revenue in this market from subscribers from other systems who visit
Panama City, a popular spring and summer vacation destination.  As of December
31, 1996, the Company utilized 11 cell sites in this market.  In 1997, the
Company plans to add two additional cell sites in this market.

OPERATIONS

  GENERAL

         The Company has concentrated its efforts on creating an integrated
network of cellular telephone systems in the southeastern United States,
principally to date in Florida, Georgia, Alabama and South Carolina.  At
December 31, 1996, the Company provided cellular telephone service





                                     - 4 -
<PAGE>   6
to 279,816 subscribers in a total of 17 licensed service areas composed of nine
MSAs and eight RSAs.  The Company also participates in the NACN, a nationwide
consortium of non-wireline cellular telephone companies, with the goal of
providing seamless regional and national cellular telephone service to its
subscribers.  Participation in the NACN allows seven-digit dialing access to
the Company's subscribers when they travel outside the Company's service areas,
providing them with convenient call delivery throughout large areas of the
United States, Canada, Mexico and Puerto Rico served by other NACN
participants.

         The following table sets forth information, at the dates indicated,
regarding the Company's subscribers, penetration rate, cost to add a net
subscriber, average monthly churn rate and average monthly service revenue per
subscriber.

<TABLE>
<CAPTION>
                                                                         At December 31,
                                                    ----------------------------------------------------------------------
                                                        1992         1993          1994            1995           1996
                                                        ----         ----          ----            ----           ----
<S>                                                  <C>            <C>           <C>            <C>             <C>

Subscribers(1)  . . . . . . . . . . . . . . . . .      37,209        65,761        117,224         211,985        279,816
Penetration(2)  . . . . . . . . . . . . . . . . .        2.20%         3.48%          4.58%           6.41%          7.45%
Cost to add a net subscriber(3) . . . . . . . . .    $    283       $   203       $    247       $     276       $    407
Average monthly churn RATE(4) . . . . . . . . . .        1.69%         1.37%          1.55%           1.55%          1.84%
Average monthly service
    revenue per subscriber(5) . . . . . . . . . .    $  68.30       $ 62.69       $  60.02       $   56.68       $  52.20
</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.  Amounts at December 31, 1992 and 1993 include the
     subscribers in the Alabama-7 RSA where the Company had interim operating
     authority from June 1991 through July 1994.  The number of subscribers
     served in the Alabama-7 RSA was 955 and 2,576 at December 31, 1992 and
     1993, respectively.  In 1994, the Company entered into an agreement to
     sell the accounts of its subscribers in the Alabama-7 RSA to the third
     party licensee of this RSA.

(2)  Determined by dividing the aggregate number of subscribers by the
     estimated population.

(3)  Determined for the 12-month periods ended December 31, 1992, 1993, 1994,
     1995 and 1996 by dividing (i) the amount of all costs of sales and
     marketing, including salaries, commissions and employee benefits paid to
     all sales and marketing personnel, travel and accommodations, meals and
     entertainment expenses incurred by sales and marketing personnel, training
     and education of such personnel, all advertising and promotional expenses
     (including cash or trade), agent commissions, credit reference expenses,
     losses on cellular telephone sales, rental expenses allocated to retail
     operations, net installation expenses and other miscellaneous sales and
     marketing charges for such period including fees paid for use of the
     CELLULAR ONE service mark, by (ii) the net subscribers added during such
     period.  Cost to add a net subscriber does not include engineering and
     technical expenses, interconnect charges or general and administrative
     expenses.

(4)  Determined for the 12-month periods ended December 31, 1992, 1993, 1994,
     1995 and 1996 by dividing total subscribers discontinuing service during
     such period by the average subscribers for such period (beginning
     subscribers plus ending subscribers, divided by two), and dividing that
     result by 12.

(5)  Determined for the 12-month periods ended December 31, 1992, 1993, 1994,
     1995 and 1996 by dividing the sum of the access, airtime, roaming, long
     distance, features, connection, disconnection and other revenues for such
     period by average subscribers for such period (the sum of the number of
     subscribers at the beginning of each month in such period divided by the
     number of months in such period), and dividing that result by 12.

  SUBSCRIBERS AND SYSTEM USAGE

         The Company's subscribers have increased from 22,536 at January 1,
1992 to 279,816 at December 31, 1996.  Reductions in the cost of cellular
telephone services and equipment at the retail





                                     - 5 -
<PAGE>   7
level have led to an increase in cellular telephone usage by general consumers
for non-business purposes. 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 broaden its subscriber base for basic cellular
telephone 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.  In
1996, cellular telephone service revenues represented 94.6% of the Company's
total revenues, with equipment sales and installation representing the balance.

  MARKETING

         The Company's marketing strategy is designed to generate continued net
subscriber growth by focusing on subscribers who are likely to generate lower
than average deactivations and delinquent accounts, while simultaneously
maintaining a low cost of adding net subscribers.  Management has implemented
its marketing strategy by training and compensating its sales force in a manner
designed to stress the importance of high penetration levels and minimum costs
per net subscriber addition.  The Company's sales staff has a two-tier
structure.  A retail sales force handles walk-in traffic, and a targeted sales
staff solicits certain industries and government subscribers.  The Company's
management believes that its internal sales force is more likely 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.  The Company believes its use of an internal sales force
keeps marketing costs low, both because commissions are lower and  because
subscriber retention is higher than if it used independent agents.  For the
year ended December 31, 1996, the Company's cost to add a net subscriber was
$407.  The Company believes its cost to add a net subscriber continues to be
among the lowest in the cellular telephone industry, principally because of its
in-house direct sales and marketing staff.

         The Company also maintains its low churn rate through an after-sale
telemarketing program implemented through its sales force and a telemarketing
service specializing in cellular customer services.  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 retail stores in
which the Company offers its cellular products and services.  As of December
31, 1996, the Company maintained 33 retail stores and 4 offices, 32 serving the
Georgia/Alabama service areas, four in Fort Myers, Florida and one in Panama
City, Florida.  Retail stores, which range in size up to 11,000 square feet are
fully equipped to handle customer service and the sale of cellular services,
telephones and accessories.  Ten of the newer and larger stores are promoted by
the Company as "Superstores", eight of which are located in the Company's
Georgia/Alabama service areas, one of which is located in the Fort Myers,
Florida service area, and one in the Panama City, Florida service area.  Each
Superstore has an authorized warranty repair center and provides cellular
telephone installation and maintenance services.  Most of the Company's larger
markets currently have at least one Superstore.  In addition, to enhance
convenience for its customers, the Company has begun to open smaller stores in
locations such as shopping malls.  In 1997, the Company plans to open six more
stores in its Georgia/Alabama service areas and one store in its Fort Myers
service area.  The Company's stores provide subscriber-friendly retail
environments -- extended hours, a large selection of phones and accessories, an
expert sales staff, and convenient locations -- which make the sales process
quick and easy for the subscriber.

         The Company markets all of its products and services under the name
CELLULAR ONE.  See "-- Service Marks".  As of April 1996, CELLULAR ONE, the
first national brand name in the cellular telephone industry, is utilized by
cellular operators in over 533 service areas with a combined estimated
population of 192 million.  The national advertising campaign conducted by
Cellular One Group enhances the Company's advertising exposure at a fraction of
what could be





                                     - 6 -
<PAGE>   8
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 service in
other markets may be more likely to use the Company's service when they travel
in the Company's service areas.  Cellular telephones of non-wireline
subscribers are either 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 dials a special code or has a
cellular telephone equipped with an "A/B" (wireline/non-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
its subscribers, 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 call delivery features from those of many of its
competitors.

  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 and busy transfer.  Several rate plans are presented to
prospective subscribers so that they may choose the plan that will best fit
their expected calling needs.  Generally, these rate plans include a high user
plan, a medium 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 that offers value to the
subscriber 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 service
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.

         The following table sets forth a breakdown of the Company's revenues
from the sale of its services and equipment for the periods indicated.

<TABLE>
<CAPTION>
                                                             Year Ended December 31,
                                ----------------------------------------------------------------------------------
                                    1992            1993              1994              1995            1996
                                    ----            ----              ----              ----            ----

                                                              (in thousands)
                                                              --------------
<S>                             <C>              <C>               <C>              <C>             <C>
Service revenue:
    Access and usage(1)         $   16,305       $   25,929        $    45,175      $  72,816       $      120,220
    Roaming(2)                       4,561            6,165              9,928         16,551               20,118
    Long distance(3)                 1,361            1,770              2,927          4,418                7,858
    Other(4)                           790            1,309              2,991          2,901                2,923
                                ----------       ----------        -----------      ---------       --------------
Total service revenue           $   23,017       $   35,173        $    61,021      $  96,686       $      151,119
Equipment sales and
     installation(5)                 4,284            6,285              7,958          8,220                8,624
                                ----------       ----------        -----------      ---------       --------------
         Total                  $   27,301       $   41,458        $    68,979      $  104,906      $      159,743
                                ==========       ==========        ===========      ==========      ==============
</TABLE>

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

(1)  Access and usage revenues include monthly access fees for providing
     service and usage fees based on per minute usage rates.

(2)  Roaming revenues are fees charged for providing services to subscribers of
     other systems when such subscribers or "roamers" place or receive a
     telephone call within one of the Company's service areas.

(3)  Long distance revenue is derived from long distance telephone calls placed
     by the Company's subscribers.





                                     - 7 -
<PAGE>   9
(4)  Other revenue includes, among other things, connect fees charged to
     subscribers for initial activation on the cellular telephone system and
     fees for feature services such as voicemail, call forwarding and call
     waiting.

(5)  Equipment sales and installation revenue includes revenue derived from the
     sale of cellular telephones and fees for the installation of such
     telephones.

         Reciprocal agreements between each of the Company's cellular telephone
systems and the cellular telephone 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 telephone 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.  For 1996, roaming revenues
accounted for 13.3% of the Company's service revenues and 12.6% of the
Company's total revenue.  This level of roaming revenue is due in part to the
fact that both of the Company's markets in Florida are regional shopping and
vacation destinations and a number of the Company's cellular telephone systems
in the Georgia and Alabama market are located along major interstate travel
corridors.

         In order to develop the market for cellular telephone service, the
Company provides retail distribution of cellular telephones and maintains
inventories of cellular telephones.  The Company negotiates volume discounts
for the purchase of cellular telephones and, in many cases, passes such
discounts on to its customers.  The Company believes that earning an operating
profit on the sale of cellular telephones is of secondary importance to
offering cellular telephones at competitive prices to potential subscribers.
To respond to competition and to enhance subscriber growth, the Company has
historically sold cellular telephones below cost.

         The Company is currently developing several new services which it
believes will provide additional revenue sources.  Packet-switching technology
will allow data to be transmitted much more quickly and efficiently than the
current circuit-switching technology.  Packet-switching uses the intervals
between voice traffic on cellular channels to send packets of data instead of
tying up dedicated cellular channels.  The packets of information, which may be
transmitted using several different channels, are subsequently reassembled and
directed to the correct party at the receiving end.  It is expected that the
development of this technology will make it possible for cellular carriers to
offer a broad range of cost-effective wireless data services, including
facsimile and electronic mail transmissions, point-of-sale credit
authorizations, package tracking, remote meter reading, alarm monitoring and
communications between laptop computer units and local area computer networks
or other computer databases.  During 1996, the Company began offering data
transmission services using packet-switching technology in its Fort Myers,
Florida MSA.  In addition, the Company began to implement the use of microcells
during 1996.  Microcells are low powered transmitters, typically constructed on
a pole or the roof of a building, which provide reduced radius service within a
specific area, such as large office buildings, underground facilities or areas
shielded by topographical obstructions.  Microcell service could be used, for
instance, to provide wireless service within an office environment that was
also integrated with wireless service to the home.

  CUSTOMER SERVICE

         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 a local staff,
including a store manager, customer service representatives, technical and
engineering staff, sales representatives and installation and repair
facilities.  Each cellular service area handles its own customer-related
functions such as customer activations, account adjustments and rate plan
changes.  Local offices and installation and repair facilities enable the
Company to better service customers, schedule installations and repairs and
monitor the technical quality of the cellular service areas.





                                     - 8 -
<PAGE>   10
         In addition, subscribers are able to report cellular telephone service
or account problems to the Company 24 hours a day.  Through the use of
sophisticated monitoring equipment, technicians at the Company's headquarters
are able to monitor the technical performance of its service areas.

         To ensure high-quality customer service, the Cellular One Group
authorizes a third-party marketing research firm to perform customer
satisfaction surveys of each of its licensees.  Licensees must achieve a
minimum customer satisfaction level in order to be permitted to continue using
the CELLULAR ONE service mark. In 1996, the Company was awarded the #1 MSA and
#2 RSA rankings in CELLULAR ONE's National Customer Satisfaction Survey.  The
Company has held number one rankings in four out of the last five years.  The
Company believes it has achieved this first place ranking through effective
implementation of its direct sales and customer service support strategy.

         The Company has implemented a new software package to combat cellular
telephone service fraud.  This new software system can detect counterfeit
cellular telephones while they are being operated and enables the Company to
terminate service to the fraudulent user of the counterfeit cellular telephone.
The Company also helps protect itself from fraud with pre-call customer
validation and subscriber profiles specifically designed to combat the
fraudulent use of subscriber accounts.

  NETWORKS

         The Company strives to provide its subscribers with virtually seamless
coverage throughout its three market areas, thereby permitting subscribers to
travel freely within this region and have their calls and custom calling
features, such as voicemail, call waiting and call forwarding, follow them
automatically without having to notify callers of their location or to rely on
special access codes.  The Company has been able to offer virtually seamless
coverage by implementing a switch interconnection plan to mobile telephone
switching offices ("MTSO") located in adjoining markets.  The Company's
equipment is built by NORTEL, formerly Northern Telecom, Inc. ("NTI"), and
interconnection between MTSOs has been achieved using NTI's internal software
and hardware.

         Through its participation in NACN since 1992 and other special
networking arrangements, the Company has pursued its goal of offering seamless
regional and national cellular service to its subscribers.  NACN is the largest
wireless telephone network system in the world -- linking non-wireline cellular
operators throughout the United States and Canada.  Membership in NACN has
aided the Company in integrating its cellular telephone systems within its
region and has permitted the Company to offer cellular telephone service to its
subscribers throughout a large portion of the United States, Canada, Mexico and
Puerto Rico.  NACN has provided the Company with a number of distinct
advantages: (i) lower costs for roaming verification, (ii) increased roaming
revenue, (iii) more efficient roaming service and (iv) integration of the
Company's markets with over 4,600 cities in more than 40 states in the United
States, Canada, Mexico and Puerto Rico.

  SYSTEM DEVELOPMENT AND EXPANSION

         The Company develops its service areas by adding channels to existing
cell sites and by building new cell sites.  Such development is done for the
purpose of increasing capacity and improving 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 2.0% (percentage of calls that are not connected on
first attempt at peak usage time during the day).





                                     - 9 -
<PAGE>   11
         The following table sets forth, by market, at the dates indicated, the
number of the Company's operational cell sites.

<TABLE>
<CAPTION>
                                                                      At December 31,
                                            -------------------------------------------------------------------
                                               1992          1993          1994          1995           1996
                                               ----          ----          ----          ----           ----
<S>                                          <C>            <C>           <C>          <C>            <C>

Georgia/Alabama . . . . . . . . . . . . .       28(1)          39(1)         70(2)        121(3)         181(4)
Fort Myers, FL  . . . . . . . . . . . . .        9             13            15            18             23
Panama City, FL . . . . . . . . . . . . .        4              7             7             9             11
                                              ----           ----          ----          ----           ----
  Total . . . . . . . . . . . . . . . . .       41(1)          59(1)         92(2)        148(3)         215(4)
---------------                               ====           ====          ====          ====           ====
</TABLE>

(1)  Includes two cell sites in the Alabama-7 RSA where the Company had interim
     operating authority from June 1991 through June 1994.

(2)  Includes one cell site in the Alabama-5 RSA where the Company has interim
     operating authority for two counties of such RSA and 17 existing cellsites
     that were purchased in the Georgia Acquisition.

(3)  Includes two existing cell sites in the Alabama-5 RSA where the Company
     has interim operating authority for two counties of such RSA and 28
     existing cell sites that were purchased in the GTE Acquisition.

(4)  Includes three existing cell sites in the Alabama-5 RSA where the Company
     has interim operating authority for two counties of such RSA and 17
     existing cell sites that were purchased in the Horizon and USCOC
     acquisitions.

         The Company estimates that in 1996 the capacity of its existing
cellular telephone systems increased 42.0%.  During 1996, the Company spent
approximately $35 million and, based on projected growth in subscriber demand,
expects to spend approximately $42 million in 1997 in order to build out its
cellular service areas, install an additional microwave network and implement
certain digital radio technology.  The Company plans to construct 70 additional
cell sites with respect to its existing cellular systems during 1997 to meet
projected subscriber demand and improve the quality of service.  Cell site
expansion is expected to enable the Company to continue to add subscribers,
enhance use of its cellular telephone systems by existing subscribers, increase
services used by subscribers of other cellular telephone systems due to the
larger geographic area covered by the cellular telephone network and further
enhance the overall efficiency of the network.  The Company believes that the
increased cellular telephone coverage will have a positive effect on market
penetration and subscriber usage.

         Microwave networks enable the Company to connect switching equipment
and cell sites without making use of local landline telephone carriers, thereby
reducing or eliminating fees paid to landline carriers.  During 1996, the
Company spent $1.0 million to build additional microwave connections.  In
addition, in 1996 the Company spent $2.6 million to build a fiber optic network
between Dothan, Alabama and Panama City, Florida.  The installation of this
network resulted in savings to the Company from a reduction in fees paid to
telephone companies for landline charges, as well as giving the Company the
ability to lease out a significant portion of capacity.

DIGITAL CELLULAR TECHNOLOGY

         Over the next decade, it is expected that cellular telephones will
gradually convert from analog to digital technology.  This conversion is due in
part to capacity constraints in many of the largest cellular markets, such as
Los Angeles, New York and Chicago.  As carriers reach limited capacity levels,
certain calls may be unable to be completed, especially during peak hours.
Digital technology increases system capacity and offers other advantages over
analog technology, 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.  The exact timing and overall costs of such
conversion are not yet known.





                                     - 10 -
<PAGE>   12
         The Company began offering TDMA (Time Division Multiple Access)
standard digital  service in its Fort Myers, Florida MSA during December 1996.
This digital network allows the Company to offer advanced cellular features and
services such as caller-ID, short message paging and extended battery life.
This digital network is performing well and the Company plans to roll out TDMA
digital cellular services in the rest of its major markets during the first and
second quarter of 1997.  Where cell sites are not yet at their maximum capacity
of radio channels, the Company is adding digital channels to the network
incrementally based on the relative demand for digital and analog channels.
Where cell sites are at full capacity, analog channels are being removed and
redeployed to expand capacity elsewhere within the network and replaced in such
cell sites by digital channels.  The implementation of digital cellular
technology over a period of several years will involve modest incremental
expenditures for switch software and possible significant cost reductions as a
result of reduced purchases of radio channels and a reduced requirement to
split existing cells.  However, as indicated above, the extent of any
implementation of digital radio channels and the amount of any cost savings
ultimately to be derived therefrom will depend primarily on subscriber demand.
In the ordinary course of business, equipment upgrades at the cell sites have
involved purchasing dual mode radios capable of using both analog and digital
technology.

         The benefits of digital radio channels can only be achieved if
subscribers purchase cellular telephones that are capable of transmitting and
receiving digital signals.  Currently, such telephones are more costly than
analog telephones.  The widespread use of digital cellular telephones is likely
to occur only over a substantial period of time and there can be no assurance
that this technology will replace analog cellular telephones.  In addition,
since most of the Company's existing subscribers currently have cellular
telephones that exclusively utilize analog technology, it will be necessary to
continue to support, and if necessary increase, the number of analog radio
channels within the network for many years.

  ACQUISITIONS

         The Company also continues to evaluate expansion through acquisitions
of both (i) other cellular properties located in Florida, Georgia, Alabama and
South Carolina that will further enhance its network and (ii) minority
interests in its existing cellular properties.  On October 31, 1994, the
Company acquired the cellular telephone systems of the Georgia Partnerships for
an aggregate purchase price of $91.7 million.  On December 1, 1995, the Company
acquired the GTE Companies for an aggregate purchase price of $158.4 million.
On June 20, 1996, the Company acquired the cellular telephone system of USCOC
(Georgia-1 RSA) for an aggregate purchase price of $31.6 million.  On July 5,
1996, the Company acquired the cellular telephone system of Horizon (Georgia-6
RSA) for an aggregate purchase price of $36.0 million  On February 1, 1997, a
majority-owned subsidiary of the Company acquired the cellular telephone system
serving Georgia-13 RSA from Mobile Communications Systems L.P. for an aggregate
purchase price of $30.0 million, subject to certain adjustments.  In 1994
through 1996, the Company acquired minority interests in six, six and five
MSAs, respectively.  See "-- Background" and "-- Recent Developments."  In
evaluating acquisition targets, the Company considers, among other things,
demographic factors, including population size and density, geographic
proximity to existing service areas, traffic patterns, cell site coverage and
required capital expenditures.





                                     - 11 -
<PAGE>   13
COMPETITION

         The cellular telephone service industry in the United States is highly
competitive.  Cellular telephone systems compete principally on the basis of
services and enhancements offered, the technical quality of the cellular
system, customer service, coverage capacity and price.  Currently, the
Company's primary competition in each of its service areas is the other
cellular licensee -- the wireline carrier.  The table below lists the wireline
competitor in each of the Company's existing service areas:

<TABLE>
<CAPTION>
                                                               Wireline
Market                                                       Competitor
------                                                       ----------
<S>                                                      <C>

Georgia/Alabama
  Albany, GA  . . . . . . . . . . . . . . . . . . . . .  ALLTEL
  Augusta, GA   . . . . . . . . . . . . . . . . . . . .  ALLTEL
  Columbus, GA  . . . . . . . . . . . . . . . . . . . .  Public Service Cellular
  Macon, GA   . . . . . . . . . . . . . . . . . . . . .  BellSouth
  Savannah, GA  . . . . . . . . . . . . . . . . . . . .  ALLTEL
  Georgia-1 RSA   . . . . . . . . . . . . . . . . . . .  BellSouth
  Georgia-6 RSA   . . . . . . . . . . . . . . . . . . .  BellSouth and Intercel(1)
  Georgia-7 RSA   . . . . . . . . . . . . . . . . . . .  Cellular Plus and BellSouth(1)
  Georgia-8 RSA   . . . . . . . . . . . . . . . . . . .  ALLTEL
  Georgia-9 RSA   . . . . . . . . . . . . . . . . . . .  ALLTEL and Public Service Cellular(1)
  Georgia-10 RSA  . . . . . . . . . . . . . . . . . . .  Cellular Plus and ALLTEL (1)
  Georgia-12 RSA  . . . . . . . . . . . . . . . . . . .  ALLTEL
  Georgia-13 RSA  . . . . . . . . . . . . . . . . . . .  ALLTEL
  Dothan, AL  . . . . . . . . . . . . . . . . . . . . .  BellSouth
  Montgomery, AL  . . . . . . . . . . . . . . . . . . .  ALLTEL
  Alabama-8 RSA . . . . . . . . . . . . . . . . . . . .  ALLTEL and Intercel (1)
Fort Myers, FL  . . . . . . . . . . . . . . . . . . . .  GTE Mobilnet
Panama City, FL . . . . . . . . . . . . . . . . . . . .  360 degree Communications Company (formerly
                                                                   Sprint Cellular)
-----------
</TABLE>

(1)  The wireline service area has been subdivided into two service areas by
     the purchasers of the authorization for the RSA.

         The Company also faces competition from broadband personal
communications services ("PCS").  PCS is a digital, wireless communications
system supported by high-density call transmitters.  Broadband PCS involves a
network of small, low-powered transceivers placed throughout a neighborhood,
business complex, community or metropolitan area to provide customers with
mobile and portable voice and data communications.  PCS subscribers communicate
using digital radio handsets.

         The Federal Communications Commission ("FCC") allocated 120 MHz of
spectrum for licensed broadband PCS.  The allocations for licensed PCS services
are split into six blocks of frequencies - blocks "A" and "B" being two 30 MHz
allocations for each of the 51 Major Trading Areas ("MTAs") throughout the
United States; block "C" being one 30 MHz allocation in each of 493 Basic
Trading Areas ("BTAs") in the United States; and blocks "D", "E" and "F" being
three 10 MHz allocations in each of the BTAs.  The FCC has concluded the
auction of all broadband PCS frequency blocks.  The table below lists the PCS
winning bidders in each of the Company's existing service areas:





                                     - 12 -
<PAGE>   14
                          Overview of PCS Competition

<TABLE>
<CAPTION>
Market         A Block   B Block       C Block                           D Block            E Block              F Block
--------------------------------------------------------------------------------------------------------------------------------
<S>            <C>       <C>           <C>                               <C>                <C>                  <C>
Albany, GA     AT&T      Powertel      Enterprise Communications         Sprint Spectrum    Bell South           Omnipoint

Augusta, GA    AT&T      Powertel      Savannah Independent              BellSouth          Sprint Spectrum      Omnipoint

Columbus,      AT&T      Powertel      R&S Communications                BellSouth          Sprint               Public
GA                                                                                          Spectrum             Services

Macon, GA      AT&T      Powertel      Georgia Independent               Sprint Spectrum    ALLTEL               Omnipoint

Savannah,      AT&T      Powertel      Southern Wireless                 Sprint Spectrum    BellSouth            Omnipoint
GA

Dothan, AL     Sprint    Powertel      Enterprise Communications         Sprint Spectrum    ALLTEL               Troup EMC
               Spectrum

Montgomery,    Sprint    Powertel      Central Alabama                   ALLTEL             BellSouth            Mercury
AL             Spectrum

Georgia-1      AT&T      Powertel      Southeast Wireless/GWI            Sprint             ALLTEL               Troup, BTA
RSA

Georgia-6      AT&T      Powertel      GWI/R&S Comm/Georgia              Sprint,            ALLTEL,              Nextwave,
RSA                                    Independent                       BellSouth          Sprint               Public Service,
                                                                                                                 Omnipoint

Georgia-7      AT&T      Powertel      Georgia Independent               Sprint             ALLTEL               Omnipoint
RSA

Georgia-8      AT&T      Powertel      GA-Independent/Southern           BellSouth, Sprint  ALLTEL, Sprint       Omnipoint
RSA                                     Wireless/Savannah Independent    BellSouth

Georgia-9      AT&T      Powertel      GA-Independent/R&S                BellSouth,         BellSouth,           Public Service,
RSA                                    Comm/Enterprise Comm              Sprint             Sprint, ALLTEL       Omnipoint

Georgia-10     AT&T/     Powertel/     Enterprise Comm/Savannah          Sprint             ALLTEL,              Omnipoint,
RSA            Powertel  PrimeCo       Independent/Southern                                 BellSouth            Mercury
                                       Wireless/GA-Independent

Georgia-12     AT&T/     Powertel      Nextwave/Kmtel/                   Sprint,            BellSouth,           Omnipoint,
RSA            Powertel  PrimeCo       Southern Wireless                 BellSouth          ALLTEL,              Southern,
                                                                                            Sprint               Mercury

Georgia-13     AT&T/     Powertel      Southeast Wireless/               Sprint             BellSouth            Mercury,
RSA            Powertel  PrimeCo       Enterprise Communications                                                 Omnipoint

Alabama-8      Sprint    Powertel      Central Alabama/R&S               Sprint,            ALLTEL,              Mercury,
RSA            Spectrum                Comm/Enterprise Comm              ALLTEL             BellSouth,           Public Service
                                                                         BellSouth          Sprint               Troup

Fort Myers,    Sprint    PrimeCo.      GWI                               BellSouth          BellSouth            Wireless One
FL             Spectrum

Panama City,   Powertel  PrimeCo.      Southeast Wireless                BellSouth          Sprint Spectrum      Mercury
FL
</TABLE>





                                     - 13 -
<PAGE>   15
         The Company also faces competition from other existing communications
technologies such as conventional mobile telephone service, SMR and enhanced
specialized mobile radio ("ESMR") systems and paging services.   ESMR is a
"cellular-like" communications service supplied by converting analog SMR
services into an integrated, digital transmission system providing for call
hand-off, frequency reuse and wide call delivery networks.

         In addition, the FCC has licensed operators to provide mobile
satellite service in which transmissions from mobile units to satellites would
augment or replace transmissions to land-based stations.  Although such a
system is designed primarily to serve remote areas and is subject to
transmission delays inherent in satellite communications, a mobile satellite
system could augment or replace communications with segments of land-based
cellular systems.  Based on current technologies, however, satellite
transmission services are not expected to be competitively priced with cellular
telephone services.

SERVICE MARKS

         CELLULAR ONE 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 AT&T and Vanguard Cellular Systems, Inc.  The Company
uses the CELLULAR ONE service mark to identify and promote its cellular
telephone service pursuant to licensing agreements with Cellular One Group (the
"Licensor").  In 1996, the Company paid $246,000 in licensing and advertising
fees under these agreements.  Licensing and advertising fees are determined
based upon the population of the licensed areas.  The licensing agreements
require the Company to provide cellular telephone service to its customers, and
to maintain a certain minimum overall customer satisfaction rating in surveys
commissioned by the Licensor.  The Company's customer satisfaction ratings have
consistently far exceeded this required minimum.  The licensing agreements
which the Company has entered into are for original five-year terms expiring on
various dates up to July 1998.  These agreements may be renewed at the
Company's option for three additional five-year terms.

REGULATION

         As a provider of cellular telephone services, the Company is subject
to extensive regulation by the federal government.

         The licensing, construction, operation, acquisition and transfer of
cellular telephone systems in the United States are regulated by the FCC
pursuant to the Communications Act of 1934, as amended (the "Communications
Act").  The FCC has promulgated rules governing the construction and operation
of cellular telephone systems and licensing and technical standards for the
provision of cellular telephone service ("FCC Rules").  For cellular licensing
purposes, the United States is divided into MSAs and RSAs.  In each market, the
frequencies allocated for cellular telephone use are divided into two equal
blocks designated as Block A and Block B.  Block A licenses were initially
reserved for non-wireline companies, such as the Company, while Block B
licenses were initially reserved for entities affiliated with a local wireline
telephone company.  Under current FCC Rules, a Block A or Block B license may
be transferred with FCC approval without restriction as to wireline
affiliation, but generally, no entity may own any substantial interest in both
systems in any one MSA or RSA.  The FCC may prohibit or impose conditions on
sales or transfers of licenses.

         Initial operating licenses are generally granted for terms of up to 10
years, renewable upon application to the FCC.  Licenses may be revoked and
license renewal applications denied for cause after appropriate notice and
hearing.  The Company's cellular licenses expire in the following years with
respect to the following number of service areas: 1997 (four); 1998 (three);
2001 (five); 2002 (three) and 2006 (two).  The Georgia-13 RSA license expires
in the year 2000.  The FCC has issued a decision confirming that current
licensees will be granted a renewal expectancy if they have





                                     - 14 -
<PAGE>   16
complied with their obligations under the Communications Act during their
license terms and provided substantial public service.  A potential challenger
will bear a heavy burden to demonstrate that a license should not be renewed if
the licensee's performance merits a renewal expectancy.  The Company believes
that the licenses controlled by the Company will be renewed in a timely manner
upon application.

         Under FCC rules, each cellular licensee was given the exclusive right
to construct one of two cellular telephone systems within the licensee's MSA or
RSA during the initial five-year period of its authorization.  At the end of
such five-year period, other persons are permitted to apply to serve areas
within the licensed market that are not served by the licensee.  Current FCC
Rules provide that competing "unserved area" applications are to be resolved
through the auction process.  The Company has no unserved areas in any of its
cellular telephone systems that have been licensed for more than five years;
however, the Company does have unserved areas in several of its cellular
service areas that have been licensed for less than five years.  Although the
Company intends to satisfy the five year service requirement for each of these
unserved cellular service areas, there can be no assurance that it will be
successful in doing so.

         The Company also regularly applies for FCC authority to use additional
frequencies, to modify the technical parameters of existing licenses, to expand
its service territory and to provide new services.  The Communications Act
requires prior FCC approval for acquisitions by the Company of other cellular
telephone systems licensed by the FCC and transfers by the Company of a
controlling interest in any of its licenses or construction permits, or any
rights thereunder.  Although there can be no assurance that any future requests
for approval or applications filed by the Company will be approved or acted
upon in a timely manner by the FCC, based upon its experience to date, the
Company has no reason to believe such requests or applications would not be
approved or granted in due course.

         The Communications Act prohibits the holding of a common carrier
license (such as the Company's cellular licenses) by a corporation of which
more than 20% of the capital stock is owned directly or beneficially by aliens.
Where a corporation such as the Company controls another entity that holds an
FCC license, such corporation may not have more than 25% of its capital stock
owned directly or beneficially by aliens, in each case, if the FCC finds that
the public interest would be served by such prohibitions.  Failure to comply
with these requirements may result in the FCC issuing an order to the Company
requiring divestiture of alien ownership to bring the Company into compliance
with the Communications Act.  In addition, fines or a denial of renewal, or
revocation of the license are possible.  The Company's Restated Certificate of
Incorporation permits the redemption of the Company's common stock from
stockholders where necessary to protect the Company's regulatory licenses.

         From time to time, legislation which could potentially affect the
Company, either beneficially or adversely, may be proposed by federal and state
legislators.  On February 8, 1996, the Telecommunications Act of 1996 (the
"Telecom Act") was signed into law, revising the Communications Act to
eliminate unnecessary regulation and to increase competition among providers of
communications services.  The Company cannot predict the future impact of this
or other legislation on its operations.

         The major provisions of the Telecom Act potentially affecting the
Company are as follows:

         Interconnection.  The Telecom Act requires state public utilities
commissions and/or the FCC to implement policies that mandate cost-based
reciprocal compensation between cellular carriers and local exchange carriers
("LEC") for interconnection services.

         On August 8, 1996, the FCC released its First Report and Order in the
matter of Implementation of the Local Competition Provisions in the
Telecommunications Act of 1996 ("FCC Order") establishing the rules for the
costing and provisioning of interconnection services and the offering of
unbundled network elements by incumbent local exchange carriers.  The FCC
Order





                                     - 15 -
<PAGE>   17
established procedures for the Company's renegotiation of interconnection
agreements with the incumbent local exchange carrier in each of the Company's
markets.  The Company is currently negotiating with the incumbent local exchange
carriers and believes that these negotiations will result in a substantial
decrease in interconnection expenses incurred by the Company.

        Facilities siting for personal wireless services.  The siting and
construction of cellular transmitter towers, antennas and equipment shelters
are often subject to state or local zoning, land use and other regulation. Such
regulation may require zoning, environmental and building permit approvals or
other state or local certification.  The Telecom Act provides that state and
local authority over the placement, construction and modification of personal
wireless services (including cellular and other commercial mobile radio
services and unlicensed wireless services) shall not prohibit or have the
effect of prohibiting personal wireless services or unreasonably discriminate
among providers of functionally equivalent services.  In addition, local
authorities  must act on requests made for siting in a reasonable period of
time and any decision to deny must be in writing and supported by substantial
evidence.  Appeals of zoning decisions that fail to comply with the provisions
of the Telecom Act can be made on an expedited basis to a court of competent
jurisdiction, which can be either federal district or state court. The Company
anticipates that, as a result the Telecom Act, it will more readily receive
local zoning approval for proposed cellular base stations.  In addition, the
Telecom Act codified the Presidential memorandum on the use of federal lands
for siting wireless facilities by requiring the President or his designee to
establish procedures whereby federal agencies will make available their
properties, rights of ways and other easements at a fair and reasonable price
for service dependent upon federal spectrum.

         Environmental effect of radio frequency emissions.  The Telecom Act
provides that state and local authorities cannot regulate personal wireless
facilities based on the environmental effects of radio frequency emissions if
those facilities comply with the federal standard.

EMPLOYEES

         At December 31, 1996 the Company had 627 full-time employees, none of
whom is represented by a labor organization.  Management considers its
relations with employees to be good.

EXECUTIVE OFFICERS

         The following is a biographical summary of the experience of the
executive officers of the Company.

         WILLIAM J. RYAN, Director, President and Chief Executive Officer.  Mr.
Ryan served as Chief Executive Officer and President of PCI, the managing
general partner of the Partnership, from 1984 until July 1995.  Mr. Ryan was
Chief Operating Officer and President of PCI from 1982 to 1984.  Mr. Ryan
continues to serve as a director of PCI.  Mr. Ryan has over 40 years of
communications and telecommunications experience.  He joined PCI in 1970
following that company's acquisition of certain radio and cable properties
which Mr. Ryan had partially owned and operated since 1955.  In his capacity as
Chief Executive Officer, Mr. Ryan has successfully led the Company through 18
acquisitions of cellular telephone systems.  Mr. Ryan is a director of the
Cellular Telecommunications Industry Association, the founding chairman of
Cable Television Advertising Bureau, Inc. and a former president of the Florida
Cable Association, the Florida Broadcasters Association and the Southern Cable
Association.

         ROBERT G. ENGELHARDT, Director, Executive Vice President and
Secretary.  Mr. Engelhardt served as Executive Vice President and Secretary of
PCI, the managing general partner of the Partnership, from 1982 until July
1995.  Mr. Engelhardt continues to serve as a director of PCI.





                                     - 16 -
<PAGE>   18
Mr. Engelhardt has over 40 years of communications and telecommunications
experience.  After joining PCI in 1972 as Chief Engineer of WHO Broadcasting
Company in Des Moines, Iowa, Mr. Engelhardt was made Technical Director of PCI
in 1976 and was promoted to Vice President-Technical Director in 1979.  Mr.
Engelhardt initiated PCI's entry into the cellular business in 1987.  Mr.
Engelhardt's broadcasting career began in 1954 with the construction and
operation of KWWL-TV in Waterloo, Iowa.  From 1955 to 1967, he served in a
variety of engineering roles for KVTV Channel 9 in Sioux City, Iowa.  From 1967
to 1972, Mr. Engelhardt served as Technical Director/Assistant Manager of
KMEG-TV in Sioux City.

         M. WAYNE WISEHART, Vice President, Treasurer and Chief Financial
Officer.  Mr. Wisehart served as Chief Financial Officer of PCI, the managing
general partner of the Partnership, from 1982 until July 1995.  He was promoted
to Treasurer of PCI in 1983 and to Vice President in 1987.  Mr. Wisehart
continues to serve as a director of PCI.  Mr. Wisehart has over 15 years of
communications and telecommunications experience.  In his capacity as Chief
Financial Officer of PCI, he was instrumental in the financial management and
direction of the Company.  Prior to joining PCI, Mr. Wisehart served as
Treasurer of the Des Moines Register & Tribune Company of Des Moines, Iowa, for
approximately five years.  He began his career in 1972 with Peat, Marwick,
Mitchell & Co.  in St. Louis, Missouri, where he became a Certified Public
Accountant.  Mr. Wisehart then served as a tax specialist for three years with
General Dynamics Corporation in St. Louis, Missouri.

         LEON J. HENSEN, Senior Vice President-General Manager.  Mr. Hensen
served as General Manager of PCI, the managing general partner of the
Partnership, from 1987 until July 1995.  Mr. Hensen has over 25 years of
communications and telecommunications experience.  In 1984, he joined American
Cellular Telephone Company ("ACTC") in Fort Myers, Florida as Vice President of
Engineering and Operations.  After the sale of ACTC to BellSouth in 1986, Mr.
Hensen provided consulting services to BellSouth and McCaw Cellular
Communications.  From 1973 to 1984, Mr. Hensen served as Vice President of
Engineering and Operations of Rogers Radio Communications Services Inc., in
Chicago, Illinois.  From 1970 to 1973, he was employed by Motorola, Inc. in the
Area Systems Engineering Group.

         K. PATRICK MEEHAN, Vice President-General Counsel and Assistant
Secretary.  Mr. Meehan served as General Counsel and Assistant Secretary of
PCI, the managing general partner of the Partnership, from 1991 until July
1995.  As an attorney with the law firm of Leibowitz & Spencer in Miami,
Florida, from 1985 to May 1991, Mr. Meehan represented clients before the FCC
and handled corporate transactions involving broadcast, paging and cellular
telephone companies.  He is a 1985 graduate of the Columbus School of Law and
The Institute for Communications Law Studies at The Catholic University of
America in Washington, D.C.  Mr. Meehan is a member of the Florida Bar, the
District of Columbia Bar and the American Bar Association.


ITEM 2.   PROPERTIES

         For each market served by the Company's operations, the Company
maintains at least one sales or administrative office and operates a number of
cell transmitter and antenna sites.  As of December 31, 1996, the Company had
32 leases for retail stores used in conjunction with its operations and 3
leases for administrative offices.  The Company also had 135 leases to
accommodate cell transmitters and antennas as of December 31, 1996.

ITEM 3.   LEGAL PROCEEDINGS

         The Company is not currently involved in any pending legal proceedings
likely to have a material adverse impact on the Company.





                                     - 17 -
<PAGE>   19
ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.
                                    PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

         The Company's common stock is traded on the NASDAQ Stock Market.  The
following table sets forth information regarding the Company's high and low
sales prices for each calendar quarter in 1995 and 1996.
<TABLE>
<CAPTION>
                                                     1995                                  1996
                                         -----------------------------        ------------------------------
                                            High                Low               High               Low
                                            ----                ---               ----               ---
              <S>                          <C>                <C>                <C>               <C>
              First Quarter(1)             $15.88             $14.25             $22.50            $16.25
              Second Quarter                18.88              14.25              22.81             18.75
              Third Quarter                 24.50              16.50              20.38             16.00
              Fourth Quarter                24.25              19.75              18.00             10.25
</TABLE>

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

(1)  The Company began trading on the NASDAQ Stock Market on March 15, 1995.

         The Company's long term revolving Credit Facility limits the payments
of cash dividends on common stock.  The Company has not paid any cash dividends
on its common stock since its inception.  As of March 27, 1997, there were
approximately 92 record holders of Class A Common Stock and one record holder
of Class B Common Stock.

ITEM 6.   SELECTED FINANCIAL DATA

         Selected financial data for the five years ended December 31, 1996,
included in the section titled "Five-Year Condensed Financial Data" on page 12
of the 1996 Annual Report to Shareholders, is incorporated herein by reference.

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

         Management's Discussion and Analysis of Financial Condition and
Results of Operations included in the section so titled on pages 13 through 27
of the 1996 Annual Report to Shareholders is incorporated herein by reference.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The Consolidated Financial Statements of the Company, including
Consolidated Balance Sheets as of December 31, 1995 and 1996, Consolidated
Statements of Operations for the years ended December 31, 1994, 1995 and 1996,
Consolidated Statements of Stockholders' Equity for the years ended December
31, 1994, 1995 and 1996, and Consolidated Statements of Cash Flows for the
years ended December 31, 1994, 1995 and 1996, and Notes to Consolidated
Financial Statements, together with the report thereon of KPMG Peat Marwick LLP
dated January 30, 1997, except for





                                     - 18 -
<PAGE>   20
Note 10 which is as of February 1, 1997, are incorporated herein by reference
from pages 29 through 49 of the 1996 Annual Report to Shareholders.

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

         None.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         Reference is made to the information set forth under the caption
"Election of Directors"  appearing in the Company's Proxy Statement dated March
19, 1997 for the Annual Meeting of Shareholders to be held on April 22, 1997
(the "1997 Proxy Statement"), which information is incorporated herein by
reference.  Information required by this item with respect to executive
officers is provided in Item 1 of this report.  See "Executive Officers."

Item 11.  Executive Compensation

         Reference is made to the information set forth under the caption
"Election of Directors -- Executive Compensation" appearing in the 1997 Proxy
Statement, which information is incorporated herein by reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

         Reference is made to the information set forth under the caption
"Beneficial Ownership of Common Stock" appearing in the 1997 Proxy Statement,
which information is incorporated herein by reference.

Item 13.  Certain Relationships and Related Transactions

         Reference is made to the information set forth under the caption
"Election of Directors --Certain Relationships and Related Transactions"
appearing in the 1997 Proxy Statement, which information is incorporated herein
by reference.
                                    PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K

         (a)(1)The following consolidated financial statements of registrant
and its subsidiaries and report of independent auditors are included in Item 8
hereof.

         Report of Independent Auditors.


         Consolidated Balance Sheets as of December 31, 1995 and 1996.

         Consolidated Statements of Operations - Years Ended December  31,
         1994, 1995, and 1996.

         Consolidated Statements of Stockholders' Equity - Years Ended
         December 31, 1994, 1995 and 1996.









                                     - 19 -
<PAGE>   21
         Consolidated Statements of Cash Flows - Years Ended December  31,
         1994, 1995 and 1996.

         Notes to Consolidated Financial Statements.

         (a)(2)  All schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission either have
been included in the Consolidated Financial Statements or are not required
under the related instructions, or are inapplicable and therefore have been
omitted.

         (a)(3)  The following exhibits are either provided with this Report or
are incorporated herein by reference:

 3.1        --       Restated Certificate of Incorporation of the Company*

 3.2        --       Bylaws of the Company*

 4.1        --       A copy of the specimen certificate for shares of the
                     Company's Class A Common Stock*

 4.2        --       Registration Rights Agreement, dated March 21, 1995*

10.1        --       Tower Lease Agreement between FMT, Ltd., a subsidiary of
                     the Company and PCI*

10.2        --       Computer Services Agreement dated March 21, 1995 between
                     the Company and PCI**

10.3        --       Tax Consulting Agreement dated January 1, 1995 between the
                     Company and PCI*

10.4        --       Transitional Management and Administrative Services
                     Agreement dated March 21, 1995 between the Company and
                     PCI**

10.5        --       PCI Non-Competition Agreement dated March 21, 1995 between
                     the Company and PCI**

10.6        --       Employment Agreement dated March 21, 1995 between the
                     Company and Mr. Ryan**

10.7        --       Employment Agreement dated March 21, 1995 between the
                     Company and Mr. Engelhardt**

10.8        --       Employment Agreement dated March 21, 1995 between the
                     Company and Mr. Wisehart**

10.9        --       Employment Agreement dated March 21, 1995 between the
                     Company and Mr. Hensen**

10.10       --       Employment Agreement dated March 21, 1995 between the
                     Company and Mr. Meehan**

10.11       --       Palmer Wireless, Inc. 1995 Stock Option Plan dated
                     February 10, 1995**

10.12       --       Palmer Wireless, Inc. 1995 Directors Stock Option Plan
                     dated February 10, 1995**

10.13       --       Palmer Wireless, Inc. Employee Stock Purchase Plan dated
                     October 27, 1995***

10.14       --       Palmer Wireless, Inc. Director Stock Purchase Plan dated
                     October 27, 1995***





                                     - 20 -
<PAGE>   22
10.15       --       Service Mark Licensing Agreements between the Company and
                     Cellular One Group*

10.16       --       Services Agreement between the Company and the North
                     American Cellular Network*

10.17       --       Purchase Agreement between the Company and Northern
                     Telecom, Inc.*

10.18       --       Agreement between the Company and Motorola, Inc.*

10.19       --       Management Agreement between the Company and PCI*

10.20       --       Services Agreement between the Company and MCI
                     Telecommunications Corporation*

10.21       --       Acquisition Agreement dated as of May 26, 1994 by and
                     among Southeast Georgia Cellular Limited Partnership,
                     Georgia 12 Cellular Limited Partnership, Georgia 12
                     Cellular Limited Partnership, Palmer Cellular Partnership
                     and BJV, L.P.*

10.22       --       Paying Agent Agreement dated as of October 28, 1994 by and
                     among NationsBank of North Carolina, N.A., SC Georgia
                     Holdings Limited Partnership, FGI Cellular Management,
                     Inc., Sterling Cellular Holdings Limited Partnership,
                     Palmer Cellular Partnership and BJV, L.P.*

10.23       --       Termination Agreement dated November 15, 1994 by Palmer
                     Cellular Partnership*

10.24       --       Cellular Supply Agreement dated October 21, 1994 by and
                     between Palmer Cellular Partnership and Northern Telecom
                     Inc.*

10.25       --       Software License and Maintenance Agreement dated May 27,
                     1994 by and between Coral Systems, Inc. and Palmer
                     Cellular  Partnership*

10.26       --       Stock Purchase Agreement dated August 24, 1995 by and
                     between Palmer Wireless Holdings, Inc. and GTE Mobile
                     Communications Incorporated****

10.27       --       Third Amended and Restated Loan Agreement dated as of
                     December 1, 1995 by and among Palmer Wireless, Inc., PNC
                     Bank, N.A., The Toronto-Dominion Bank, NationsBank of
                     Texas, N.A., Corestates Bank, N.A., First National Bank of
                     Maryland, NatWest Bank, N.A., The First National Bank of
                     Boston, CIBC Inc., First Union National Bank of North
                     Carolina, Royal Bank of Canada, Shawmut Bank Connecticut,
                     N.A., Union Bank, Bank of Hawaii, Banque Nationale de
                     Paris, and Toronto Dominion (Texas), Inc., Merita Bank
                     Ltd., Bank of Montreal (Chicago Branch), Compagnie
                     Financiere DE CIC Et DE L'Union Europeene, First Hawaiian
                     Bank, Pearl Street L.P., Societe Generale, The Bank of
                     California, N.A.*****

10.28       --       Asset Acquisition Agreement by and among Horizon Cellular
                     Telephone Company of Spalding, L.P., Columbus Cellular
                     Telephone Company, and Macon Cellular Telephone Systems
                     Limited Partnership, dated March 22, 1996 ******





                                     - 21 -
<PAGE>   23
10.29       --       Sale and Purchase Agreement by and among United States
                     Cellular Corporation, USCOC of Georgia RSA #1, Inc., and
                     Palmer Wireless Holdings, Inc., dated April 23, 1996
                     *******

10.30       --       Sale and Purchase Agreement by and between Mobile
                     Communications Systems, L.P. and Palmer Wireless Holdings,
                     Inc., dated August 22, 1996 ********

10.31       --       First Amendment to Third Amended and Restated Loan
                     Agreement dated as of May 31, 1996 by and among Palmer
                     Wireless, Inc., PNC Bank, National Association, The
                     Toronto-Dominion Bank, NationsBank of Texas, N.A.,
                     Corestates Bank, N.A., Fleet Bank, N.A. (formerly known as
                     NatWest Bank N.A.), First National Bank of Maryland, The
                     First National Bank of Boston, CIBC Inc., First Union
                     National Bank of North Carolina, Royal Bank of Canada,
                     Fleet National Bank (formerly known as Shawmut Bank
                     Connecticut, N.A.), Banque Nationale De Paris, Union Bank,
                     Bank of Hawaii, Merita Bank Ltd, Bank of Montreal, Chicago
                     Branch, Compagnie Financiere DE CIC Et DE L'Union
                     Europeenne, First Hawaiian Bank, Societe Generale, The
                     Bank of California, N.A., Society National Bank and Credit
                     Lyonnais Cayman Island Branch.

10.32       --       Second Amendment to Third Amended and Restated Loan
                     Agreement dated as of August 12, 1996 by and among Palmer
                     Wireless, Inc., PNC Bank, National Association, The
                     Toronto-Dominion Bank, NationsBank of Texas, N.A.,
                     Corestates Bank, N.A., Fleet Bank, N.A., First National
                     Bank of Maryland, The First National Bank of Boston, CIBC
                     Inc., First Union National Bank of North Carolina, Royal
                     Bank of Canada, Fleet National Bank, Banque Nationale de
                     Paris, Union Bank of California, N.A. (formerly known as
                     Union Bank and The Bank of California, N.A.), Bank of
                     Hawaii, Merita Bank Ltd, Bank of Montreal, Chicago Branch,
                     Compagnie Financiere DE CIC Et DE L'Union Europeenne,
                     First Hawaiian Bank, Societe Generale, KeyBank National
                     Association (formerly known as Society National Bank) and
                     Credit Lyonnais Cayman Island Branch.

11          --       Computation of Earnings per Share.

13          --       1996 Annual Report to Shareholders of Palmer Wireless,
                     Inc.  Such report is furnished for the information of the
                     Commission only and, except for those portions thereof
                     which are expressly incorporated by reference in the
                     Annual Report on Form 10-K, is not deemed to be filed as
                     part of this Report.
21          --       Subsidiaries of the Company*********

23          --       Consent of KPMG Peat Marwick LLP

27          --       Financial Data Schedule


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

              *    Incorporated by reference to the Exhibits to the Company's
                   Registration Statement on Form S-1 (Registration No.
                   33-75218).





                                     - 22 -
<PAGE>   24
             **    Incorporated by reference to the Exhibits to the Company's
                   quarterly report on Form 10-Q for the quarter ended March
                   31, 1995 (File No. 0-255-88) which was filed with the
                   Commission on May 12, 1995.

            ***    Incorporated by reference to the Exhibits to the Company's
                   Registration Statement on Form S-8 (File No. 33-99170) which
                   was filed with the Commission on November 9, 1995.

           ****    Incorporated by reference to Exhibit No. 2 to the Company's
                   Current Report on Form 8-K which was filed with the
                   Commission on August 30, 1995.

          *****    Incorporated by reference to the Exhibits to the Company's
                   Current Report on Form 8-K which was filed with the
                   Commission on December 14, 1995.

         ******    Incorporated by reference to the Exhibits to the Company's
                   Current Report on Form 8-K which was filed with the
                   Commission on April 9, 1996.

        *******    Incorporated by reference to the Exhibits to the Company's
                   Current Report on Form 8-K which was filed with the
                   Commission on May 1, 1996.

       ********    Incorporated by reference to the Exhibits to the Company's
                   Current Report on Form 8-K which was filed with the
                   Commission on September 3, 1996.

      *********    Incorporated by reference to the Exhibits to the Company's
                   Registration Statement on Form S-1 (Registration No.
                   333-00122).

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

         (b)     (1)  The Registrant filed a Current Report on Form 8-K on
                 February 12, 1996 which included financial statements for
                 Georgia Metronet, Inc. and Augusta Metronet, Inc., which were
                 acquired on December 1, 1995 by Palmer Wireless Holdings, Inc.
                 ("Holdings"), a wholly-owned subsidiary of the Registrant.

                 (2)  The Registrant filed a Current Report on Form 8-K on
                 April 9, 1996 to report that two of its subsidiaries, Columbus
                 Cellular Telephone Company and Macon Cellular Telephone
                 Systems Limited Partnership, had signed a definitive agreement
                 with Horizon Cellular Telephone Company of Spalding, L.P. for
                 the purchase of the cellular telephone system serving the
                 Georgia-6 Rural Service Area (Market No. 376(a)) for a total
                 purchase price of $35 million, subject to certain adjustments.

                 (3)  The Registrant filed a Current Report on Form 8-K on May
                 1, 1996 to report that Holdings had signed a definitive
                 agreement with United States Cellular Corporation and USCOC of
                 Georgia RSA#1, Inc., pursuant to which Holdings agreed to
                 purchase the cellular telephone system serving the Georgia-1
                 Rural Service Area (Market No.  371(A)) for a total cash
                 purchase price of $31.5 million, subject to certain
                 adjustments.

                 (4)  The Registrant filed a Current Report on Form 8-K on
                 September 3, 1996 to report that Holdings had signed a
                 definitive agreement with Mobile Communications Systems, L.P.,
                 pursuant to which Holdings agreed to purchase the cellular
                 telephone system serving the Georgia-13 Rural Service Area
                 (Market No. 383) for a total cash purchase price of $36.5
                 million, subject to certain downward adjustments of up to $1
                 million.

         (c)     Exhibits to this Form 10-K are attached or incorporated by
                 reference as stated above.

         (d)     None.





                                     - 23 -
<PAGE>   25



                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized as of the 31st day
of March, 1997.

                                        PALMER WIRELESS, INC.


                                            /s/ WILLIAM J. RYAN

                                            William J. Ryan
                                            Director, President and
                                            Chief Executive Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated and on the dates indicated.

<TABLE>
<CAPTION>
Signatures                                                 Title                              Date

<S>                                              <C>                                   <C>
/s/  William J. Ryan
-------------------------------------
    William J. Ryan                              Director, President and               March 31, 1997
                                                 Chief Executive Officer
                                                 (Principal Executive Officer)


/s/  M. Wayne Wisehart
-------------------------------------
    M. Wayne Wisehart                            Vice President, Treasurer             March 31, 1997
                                                 and Chief Financial Officer
                                                 (Principal Financial Officer and
                                                 Principal Accounting Officer)

/s/  Robert G. Engelhardt
-------------------------------------
    Robert G. Engelhardt                         Director, Executive Vice              March 31, 1997
                                                 President and Secretary


/s/  Thomas D. McCloskey, Jr.
-------------------------------------
    Thomas D. McCloskey, Jr.                     Director                              March 31, 1997


/s/  Kermit S. Sutton
-------------------------------------
    Kermit S. Sutton                             Director                              March 31, 1997
</TABLE>





<PAGE>   26





<TABLE>
<S>                                              <C>                                   <C>
/s/  Vickie A. Palmer
-----------------------------------
    Vickie A. Palmer                             Director                              March 31, 1997



/s/  James S. Cownie
-----------------------------------
    James S. Cownie                              Director                              March 31, 1997



/s/  Clark R. Mandigo
-----------------------------------
    Clark R. Mandigo                             Director                              March 31, 1997
</TABLE>





<PAGE>   27



                                 EXHIBIT INDEX


<TABLE>
<CAPTION>
                                                                                         Sequentially
Exhibit                                                                                    Numbered
Number                       Description                                                     Page
------                       -----------                                                --------------
<S>       <C>
 3.1       --    Restated Certificate of Incorporation of the Company*

 3.2       --    Bylaws of the Company*

 4.1       --    A copy of the specimen certificate for shares of the Company's
                 Class A Common Stock*

 4.2       --    Registration Rights Agreement, dated March 21, 1995*

10.1       --    Tower Lease Agreement between FMT, Ltd., a subsidiary of the
                 Company and PCI*

10.2       --    Computer Services Agreement dated March 21, 1995 between the
                 Company and PCI**

10.3       --    Tax Consulting Agreement dated January 1, 1995 between the
                 Company and PCI*

10.4       --    Transitional Management and Administrative Services Agreement
                 dated March 21, 1995 between the Company and PCI**

10.5       --    PCI Non-Competition Agreement dated March 21, 1995 between the
                 Company and PCI**

10.6       --    Employment Agreement dated March 21, 1995 between the Company
                 and Mr. Ryan**

10.7       --    Employment Agreement dated March 21, 1995 between the Company
                 and Mr. Engelhardt**

10.8       --    Employment Agreement dated March 21, 1995 between the Company
                 and Mr. Wisehart**

10.9       --    Employment Agreement dated March 21, 1995 between the Company
                 and Mr. Hensen**

10.10      --    Employment Agreement dated March 21, 1995 between the Company
                 and Mr. Meehan**

10.11      --    Palmer Wireless, Inc. 1995 Stock Option Plan dated February
                 10, 1995**

10.12      --    Palmer Wireless, Inc. 1995 Directors Stock Option Plan dated
                 February 10, 1995**

10.13      --    Palmer Wireless, Inc. Employee Stock Purchase Plan dated
                 October 27, 1995***

10.14      --    Palmer Wireless, Inc. Director Stock Purchase Plan dated
                 October 27, 1995***

10.15      --    Service Mark Licensing Agreements between the Company and
                 Cellular One Group*

10.16      --    Services Agreement between the Company and the North American
                 Cellular Network*

10.17      --    Purchase Agreement between the Company and Northern Telecom,
                 Inc.*

10.18      --    Agreement between the Company and Motorola, Inc.*

</TABLE>

<PAGE>   28



10.19      --    Management Agreement between the Company and PCI*

10.20      --    Services Agreement between the Company and MCI
                 Telecommunications Corporation*

10.21      --    Acquisition Agreement dated as of May 26, 1994 by and among
                 Southeast Georgia Cellular Limited Partnership, Georgia 12
                 Cellular Limited Partnership, Georgia 12 Cellular Limited
                 Partnership, Palmer Cellular Partnership and BJV, L.P.*

10.22      --    Paying Agent Agreement dated as of October 28, 1994 by and
                 among NationsBank of North Carolina, N.A., SC Georgia Holdings
                 Limited Partnership, FGI Cellular Management, Inc., Sterling
                 Cellular Holdings Limited Partnership, Palmer Cellular
                 Partnership and BJV, L.P.*

10.23      --    Termination Agreement dated November 15, 1994 by Palmer
                 Cellular Partnership*

10.24      --    Cellular Supply Agreement dated October 21, 1994 by and
                 between Palmer Cellular Partnership and Northern Telecom Inc.*

10.25      --    Software License and Maintenance Agreement dated May 27, 1994
                 by and between Coral Systems, Inc.  and Palmer Cellular
                 Partnership*

10.26      --    Stock Purchase Agreement dated August 24, 1995 by and between
                 Palmer Wireless Holdings, Inc. and GTE Mobile Communications
                 Incorporated****

10.27      --    Third Amended and Restated Loan Agreement dated as of December
                 1, 1995 by and among Palmer Wireless, Inc., PNC Bank, N.A.,
                 The Toronto-Dominion Bank, NationsBank of Texas, N.A.,
                 Corestates Bank, N.A., First National Bank of Maryland,
                 NatWest Bank, N.A., The First National Bank of Boston, CIBC
                 Inc., First Union National Bank of North Carolina, Royal Bank
                 of Canada, Shawmut Bank Connecticut, N.A., Union Bank, Bank of
                 Hawaii, Banque Nationale de Paris, and Toronto Dominion
                 (Texas), Inc., Merita Bank Ltd., Bank of Montreal (Chicago
                 Branch), Compagnie Financiere DE CIC Et DE L'Union Europeene,
                 First Hawaiian Bank, Pearl Street L.P., Societe Generale, The
                 Bank of California, N.A.*****

10.28            Asset Acquisition Agreement by and among Horizon Cellular
                 Telephone Company of Spalding, L.P., Columbus Cellular
                 Telephone Company, and Macon Cellular Telephone Systems
                 Limited Partnership, dated March 22, 1996 ******

10.29            Sale and Purchase Agreement by and among United States
                 Cellular Corporation, USCOC of Georgia RSA #1, Inc., and
                 Palmer Wireless Holdings, Inc., dated April 23, 1996 *******

10.30            Sale and Purchase Agreement by and between Mobile
                 Communications Systems, L.P. and Palmer Wireless Holdings,
                 Inc., dated August 22, 1996 ********

10.31      --    First Amendment to Third Amended and Restated Loan Agreement
                 dated as of May 31, 1996 by and among Palmer Wireless, Inc.,
                 PNC Bank, National Association, The Toronto-Dominion Bank,
                 NationsBank of Texas, N.A., Corestates Bank, N.A., Fleet Bank,
                 N.A. (formerly known as NatWest Bank N.A.), First National
                 Bank of Maryland, The First National Bank of Boston, CIBC
                 Inc., First Union National Bank of North Carolina, Royal Bank
                 of Canada,





<PAGE>   29



                 Fleet National Bank (formerly known as Shawmut Bank
                 Connecticut, N.A.), Banque Nationale De Paris, Union Bank,
                 Bank of Hawaii, Merita Bank Ltd, Bank of Montreal, Chicago
                 Branch, Compagnie Financiere DE CIC Et DE L'Union Europeenne,
                 First Hawaiian Bank, Societe Generale, The Bank of California,
                 N.A., Society National Bank and Credit Lyonnais Cayman Island
                 Branch.

10.32      --    Second Amendment to Third Amended and Restated Loan Agreement
                 dated as of August 12, 1996 by and among Palmer Wireless,
                 Inc., PNC Bank, National Association, The Toronto-Dominion
                 Bank, NationsBank of Texas, N.A., Corestates Bank, N.A., Fleet
                 Bank, N.A., First National Bank of Maryland, The First
                 National Bank of Boston, CIBC Inc., First Union National Bank
                 of North Carolina, Royal Bank of Canada, Fleet National Bank,
                 Banque Nationale de Paris, Union Bank of California, N.A.
                 (formerly known as Union Bank and The Bank of California,
                 N.A.), Bank of Hawaii, Merita Bank Ltd, Bank of Montreal,
                 Chicago Branch, Compagnie Financiere DE CIC Et DE L'Union
                 Europeenne, First Hawaiian Bank, Societe Generale, KeyBank
                 National Association (formerly known as Society National Bank)
                 and Credit Lyonnais Cayman Island Branch.

11         --    Computation of Earnings per Share

13               1996 Annual Report to Shareholders of Palmer Wireless, Inc.
                 Such report is furnished for the information of the Commission
                 only and, except for those portions thereof which are
                 expressly incorporated by reference in the Annual Report on
                 Form 10-K, is not deemed to be filed as part of this Report.

21         --    Subsidiaries of the Company*********

23         --    Consent of KPMG Peat Marwick LLP

27         --    Financial Data Schedule

---------------
         *  Incorporated by reference to the Exhibits to the Company's
            Registration Statement on Form S-1 (Registration No.  33-75218).

        **  Incorporated by reference to the Exhibits to the Company's
            quarterly report on Form 10-Q for the quarter ended March 31, 1995
            (File No. 0-255-88) which was filed with the Commission on May 12,
            1995.

       ***  Incorporated by reference to the Exhibits to the Company's
            Registration Statement on Form S-8 (File No. 33-99170) which was
            filed with the Commission on November 9, 1995.

      ****  Incorporated by reference to Exhibit No. 2 to the Company's Current
            Report on Form 8-K which was filed with the Commission on August
            30, 1995.

     *****  Incorporated by reference to the Exhibits to the Company's Current
            Report on Form 8-K which was filed with the Commission on December
            14, 1995.

    ******  Incorporated by reference to the Exhibits to the Company's Current
            Report on Form 8-K which was filed with the Commission on April 9,
            1996.

  *******   Incorporated by reference to the Exhibits to the Company's Current
            Report on Form 8-K which was filed with the Commission on May 1,
            1996.

 ********   Incorporated by reference to the Exhibits to the Company's Current
            Report on Form 8-K which was filed with the Commission on September
            3, 1996.

*********   Incorporated by reference to the Exhibits to the Company's
            Registration Statement on Form S-1 (Registration No.  333-00122).