Otelco Declares Distribution Payment to IDS Holders



    ONEONTA, AL, Feb. 21 /CNW/ - 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 March 31, 2008 to holders of record at the close of business on
March 14, 2008.
    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 December 30, 2007 through March 29, 2008 of $0.24375 per note.

    ABOUT OTELCO

    Otelco Inc., headquartered in Oneonta, Alabama, provides wireline
telephone services in portions of Alabama, Maine and Missouri. The Company's
services include local and long distance telephone, network access, transport
services, digital high-speed and dial-up Internet access, cable television and
other telephone related services. With more than 67,900 access lines, cable
modems and digital subscriber 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.




For further information:

For further information: Curtis Garner, Chief Financial Officer, Otelco
Inc., (205) 625-3571, Curtis@otelcotel.com

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Otelco Inc.

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