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Otelco Declares Distribution Payment to IDS Holders

ONEONTA, Ala.--(BUSINESS WIRE)--Nov. 9, 2006--Otelco Inc. (AMEX: OTT) (TSX: OTT.un), the sole wireline telephone services provider in several 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 January 2, 2007 to holders of record at the close of business on December 15, 2006.

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 September 30, 2006 through December 29, 2006 of $0.24375 per note.

ABOUT OTELCO

Otelco Inc., headquartered in Oneonta, Alabama, is the sole wireline telephone services provider in several rural communities 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 more than 62,000 access line, 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.otelco.net.


    CONTACT: Otelco Inc.
             Curtis Garner, 205-625-3571
             Chief Financial Officer
             Curtis@otelcotel.com

    SOURCE: Otelco Inc.