Alaska Communications Systems Reports First Quarter 2000 Revenue of $78.3 Million Compared to $71.1 Million for 1999.

Business Editors

ANCHORAGE, Alaska--(BUSINESS WIRE)--May 3, 2000

Alaska Communications Systems Group, Inc. ("ACS") (Nasdaq:ALSK) reported today consolidated first quarter 2000 revenues of $78.3 million, EBITDA of $28.4 million, and a net loss of $3.1 million, or $.10 per share.

Operating Revenues increased $7.2 million over the first quarter of 1999, or 10.1%. Reported EBITDA was $28.4 million-- an increase of $1.7 million, or 6.5% over the first quarter of 1999. The net loss of $3.1 million improved from the preceding quarter's net loss from continuing operations by $8.4 million, or 72.8%. Because of differences in capital structures and the resulting impact on interest expense, combined net income for the first quarter 1999 is not comparable with the consolidated net income of ACS for 2000.

Chuck Robinson, Chairman and CEO of ACS said, "We are pleased that the first quarter 2000 results exceeded our expectations. We have demonstrated the capacity to grow revenues very early in our history. We have begun several new marketing initiatives in the first quarter that will contribute positively to our future results. The introduction of the ACS brand in the first quarter will assist in demonstrating to our customers and investors the Company's commitment to revenue growth through technology, innovation, and superior service."

Consolidated Financial Highlights:

The first quarter 2000 consolidated results include the operations acquired by ACS on May 14, 1999. The first quarter 1999 results represent the combined results of the acquired companies prior to acquisition plus the results of ACS.

-- Revenues increased to $78.3 million from $71.1 million in the

prior year, or $7.2 million and 10.1%. Local telephone,

cellular, and interexchange network, data services and other

revenues all increased compared to the first quarter 1999

results of the predecessor companies.

-- Local telephone revenues grew 7.8%, from $59.8 million in

the first quarter of 1999 to 64.5 million in the first

quarter of 2000. Ending access lines grew to 327,236

compared with 310,730 at the end of the first quarter

1999, or 5.3%.

-- Cellular revenues grew to $8.6 million or 19% over the

same quarter in 1999. Customer growth was 7.6% over the

same period. The average monthly cellular revenue per unit

(ARPU) increased from $36.16 to $39.61 as a result of the

introduction of new statewide and national pricing

programs and the initial benefits of the digital upgrade

completed in the first quarter of 2000.

-- Interexchange network, data services and other revenues,

which includes primarily long distance, data and Internet 

services revenues, increased from $4.1 million in 1999 to

$5.2 million in 2000 -- an increase of $1.2 million, or

28.3%. Long distance revenues, which comprised most of the

increase, rose from $2.6 million in 1999 to $3.8 million

in 2000. Long distance minutes of use increased from 16.9

million minutes to 19.0 million minutes for 1999 and 2000,

respectively.

-- Operating expenses increased $7.4 million, or 12.4%, from

$59.7 million for the three months ended March 31, 1999 to

$67.1 million for the three months ended March 31, 2000. As a

percentage of revenues, operating expenses for the first

quarter were fairly consistent with the first quarter 1999

results of the predecessor companies.

-- Local telephone expenses increased from $34.9 million for

the three months ended March 31, 1999 to $37.5 million for

the three months ended March 31, 2000 - an increase of

$2.6 million, or 7.3%. Local telephone expense included

significant investment in marketing of the unified ACS

brand name, which was rolled out in the first quarter, and

marketing expenses related to a successful campaign to

increase ACS's penetration of enhanced features.

-- Cellular expenses increased $0.9 million, or 18.5%, for

the three months ended March 31, 2000 compared to the

three months ended March 31, 1999. Certain duplicate 

network costs were incurred in the first quarter during

conversion to a fully digital network across the entire

ACS cellular service area. Management expects that

cellular expenses as a percentage of cellular revenue will

continue to decline as cellular penetration and

subscribers increase over time.

-- Interexchange network, data services and other expenses

increased by $2.0 million, or 44.3%, and increased as a

percentage of revenue from 109.2% in 1999 to 122.7% in

2000. The increase in interexchange network, data services

and other was the result of additional circuit and other

costs associated with developing the Company's statewide

network and Internet infrastructure and increases in

minutes of use for long distance as discussed above.

-- EBITDA was $28.4 million compared to the combined first

quarter 1999 EBITDA of the predecessor companies of $26.6

million, or 6.5%.

Robinson added, "Our first quarter 2000 result exceeded our expectations. Despite expenses incurred in converting our cellular system to fully digital, our ACS brand unification campaign, and service improvements throughout our network, we achieved our overall earnings objectives. The investments we have made and will continue to make in our network and back-office support infrastructure will lead to ongoing improvement in our quality of services, our ability to provide many more new and innovative services, and the productivity of our employees. We look for continued strong growth in revenues and an improving cost structure as we move forward."

ACS is the leading diversified, facilities based telecommunications carrier in Alaska, offering local telephone service, wireless, long distance, data, and internet services to business and residential customers throughout Alaska. ACS currently serves approximately 327,000 access lines and 72,000 cellular customers throughout the State. Members of the ACS senior management team have played significant roles in bringing advanced technology to Alaska for more than four decades. ACS is traded on NASDAQ under the symbol "ALSK."

Statements contained in this press release that are not historical fact are "forward-looking statements" that involve a number of known and unknown risks or uncertainties. Additional factors, which may affect actual results, are contained in the Company's filings with the SEC. Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.

               ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
     CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS

          For the Three Months Ended March 31, 2000 and 1999
                       (Unaudited, in Thousands)


                                                2000         1999
                                            Consolidated   Combined
Operating revenues:
 Local telephone                               64,460       59,788
 Cellular                                       8,636        7,256
 Interexchange network,
   data services and other                      5,228        4,074
                                             --------     --------
       Total operating revenues                78,324       71,118

Operating expenses:
 Local telephone                               37,467       34,910
 Cellular                                       6,084        5,136
 Interexchange network,
   data services and other                      6,418        4,447
 Depreciation and amortization                 17,126       16,801
                                             --------     --------
       Total operating expenses                67,095       61,294

Operating income                               11,229        9,824

Other income and expense:
 Interest expense                             (15,902)      (2,961)
 Interest income and other                      1,562        1,184
 Equity in earnings of
   minority investments                          (142)        (509)
                                             --------     --------
       Total other income
         and expense                          (14,482)      (2,286)

Loss before income taxes                       (3,253)       7,538
Income tax (benefit) expense                     (115)       2,709
                                             --------     --------
Net loss                                     $ (3,138)    $  4,829
                                             ========     ========


EBITDA                                       $ 28,355     $ 26,625

Net loss per share - basic and diluted       $  (0.10)
Weighted average shares outstanding            32,696

      Note: The Combined Statement of Operations includes the operating
activity of ATU and Century's Alaska Properties from January 1, 1999
through March 31, 1999.

               ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
               CONDENSED CONSOLIDATED BALANCE SHEET DATA
                       (Unaudited, in Thousands)

                                          March 31,   December 31,
                                            2000         1999

Cash and cash equivalents                 $ 86,747     $101,994
Property, plant and equipment, net         450,219      449,827
Total assets                               922,465      934,443
Long-term debt and
  capital lease obligations                616,288      612,756
Stockholders' equity                       245,258      247,968


               ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
                       KEY OPERATING STATISTICS
                              (Unaudited)

                                     March 31,     March 31,
                                       2000          1999

Local telephone:
 Access lines                         327,236       310,730

Cellular:
 Ending subscribers                    72,270        67,196
 Penetration                            15.7%         14.6%
 Minutes of Use                    25,154,541    17,975,611