Having got out of the long-distance telephone business by selling its interest in US Sprint to its partner, GTE Corp is anxious to build up its local phone service operations to match those of the Baby Bells, and to expand its cellular operations. Accordingly, the company proposed marriage to Atlanta-based Contel Corp yesterday. GTE’s proposal is to offer 1.27 of its own shares for each Contel out, valuing them at about $39.375 against a closing price of $28 the previous day, and values the company at about $6,240m. The proposed bid put a cat among the telephone share pigeons, with Contel’s 90%-owned Contel Cellular Inc putting on $4.375 to $22, with Telephone & Data Systems, Southern New England Telecommunications, Centel Corp and Rochester Telephone all up a buck or two. Contel’s board was still considering the GTE proposal as we closed for press last night.