ONEONTA, Ala. -- Otelco Inc. (AMEX: OTT; TSE: OTT.un), the sole wireline telephone services provider in several rural communities in Alabama and Missouri, today announced results for its third quarter ended September 30, 2005. The Company’s quarterly results reflect the third full quarter of operations under its new capital structure and its acquisition of Mid-Missouri Holding Corp. in December 2004. Key quarterly highlights for Otelco include:

“Our results for the quarter were solid, especially given the economic conditions and the impact on discretionary spending caused by the rapid rise in fuel prices,” said Mike Weaver, President and Chief Executive Officer of Otelco. “Our performance for the first nine months of this year has been very much in line with our expectations.”

“We are very pleased with the growth in our total access line equivalents this quarter as the additional marketing plans we implemented during the quarter were successful. In third quarter, we added 693 total access line equivalents. On an annualized basis, our access lines this year have declined at a 3.5% rate, down from 3.8% at the end of the second quarter. On a year-to-date basis, we have grown total access line equivalents, which we define as access lines, cable modems and digital subscriber lines, at an annualized rate of 3.5%. Our long distance and cable television subscribers increased in both the third quarter and year-to-date, up 5.0% and 6.1%, respectively this year. Our digital high-speed Internet customers continued to grow steadily, adding 947 customers during third quarter which is an increase of 21.5% for the quarter and 53.5% for the year. At the end of the third quarter, we had a penetration rate of 16.3% for our digital high-speed Internet access,” added Weaver.

“Our focus on growing digital high-speed access, controlling costs and slowing access line losses positions us well for next quarter and to start next year. We remain focused on executing our business plan and generating cash flows, allowing us to return cash back to our shareholders. On September 30, 2005, Otelco again paid over $4.0 million to its IDS holders, representing interest and dividends of approximately $0.420 per Income Deposit Security (IDS).”

Otelco Inc.