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Otelco Declares Distribution Payment to IDS Holders

ONEONTA, Alabama (May 14, 2008) Otelco Inc. (AMEX: OTT; TSX: OTT.un), the sole wireline telephone services provider in rural communities in Alabama, Maine and Missouri, today announced that its Board of Directors has declared a distribution of $0.42 per Income Deposit Security (each an “IDS”), which will be made on June 30, 2008 to holders of record at the close of business on June 13, 2008. The distribution represents the fourteenth consecutive quarterly distribution since the company completed its initial public offering in December 2004.

Each IDS is comprised of one share of Class A Common Stock and $7.50 principal amount of 13% senior subordinated notes due 2019.

The distribution consists of a dividend of $0.17625 per share of Class A common stock and an interest payment on the senior subordinated notes for the period from March 30, 2008 through June 29, 2008 of $0.24375 per note.


Otelco Inc., headquartered in Oneonta, Alabama, provides wireline telephone services in Alabama, Maine and Missouri. The Company’s services include local and long distance telephone, network access, transport, digital high-speed and dial-up Internet access, cable television and other telephone related services. With over 69,000 voice and data access lines, which are collectively referred to as access line equivalents, Otelco is among the top 40 largest local exchange carriers in the United States based on number of access line. Otelco operates six incumbent telephone companies serving rural markets, or rural local exchange carriers, each of which can trace its history as a local telecommunications provider as far back as the early 1900s.  It also provides competitive telephone services through several subsidiaries. For more information, visit the Company’s web site at www.otelcoinc.com.


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