California's cellular telephone users, who have made the state the mobile communications capital of the nation, may soon enjoy rate reductions for the first time since service began here in 1984.

But the cuts, which could slash rates in one of the nation's most expensive cellular markets by as much as one-third, are likely to add more congestion to the already overcrowded cellular airwaves, the phone companies say.

The move by the California Public Utilities Commission to cut cellular rates is an unprecedented action that will be closely watched by regulators and cellular phone companies across the nation.

Steps toward the possible rate reduction began earlier this month when the commission ordered cellular network operators to dramatically lower the rates they charge service wholesalers.

While the PUC's action is widely viewed as a big boost for consumers, cellular companies say just the opposite is true.

"We're barely keeping pace with the existing subscriber growth," said Brian Kidney, a spokesman for PacTel Cellular, the state's largest operator. "The network couldn't handle the traffic volumes that would be generated by substantially lower prices."

The PUC ruling comes at a time of growing complaints nationally and in California about insufficient competition in the cellular industry, which got its start nearly nine years ago.

To ensure some level of competition, the federal government awarded exclusive cellular franchises to two network operators in each geographical region. But critics say that usage fees charged for air time by the two cellular franchisees in each region remain remarkably similar--at or near their 1984 level. By contrast, the cost of basic cellular handsets, available from dozens of different manufacturers, has dropped by 90% in eight years.

Cellular pricing, network operators say, has been fueled by high demand, especially in Southern California, home to an estimated 800,000 of the state's 1.1 million cellular subscribers.

"Cellular is not priced in relationship to its cost but in relationship to what the market will bear," Kidney said. "Price is the point at which the customer assigns value to a service. . . . We've had 30% subscriber growth every year. That shows customer satisfaction."

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The PUC's bold move to impose regulation on the largely unregulated cellular industry could trigger similar moves elsewhere in the nation, some analysts say. Furthermore, they say, regulators could award additional cellular franchises to stimulate competition.