Otelco Completes IDS Offering and Amendment to Credit Agreement; Announces Plans to Release 2007 Second Quarter Results.

ONEONTA, Ala. -- Otelco Inc. (AMEX: OTT)(TSX: OTT.un), the sole wireline telephone services provider in several rural communities in Alabama, Maine and Missouri, recently completed the sale of 3,000,000 Income Deposit Security units, using the proceeds to pay down over $55 million in senior debt. Today, the Company announced that it has entered into an amendment to its existing credit agreement to reduce the interest rate margin on borrowings by a minimum of 75 basis points.

The Company also announced that it will release its 2007 second quarter financial results after the close of trading on Wednesday, August 8, 2007. The Company will hold a conference call to discuss its second quarter results on Thursday, August 9, 2007 at 11:00 a.m. (Eastern Time). To listen to the call, participants should dial [phone] approximately 10 minutes prior to the start of the call. A telephonic replay will be available from 2:00 p.m. (Eastern Time) August 9, 2007 through August 16, 2007 by dialing [phone] and entering Confirmation Code 5164081.

The live broadcast of Otelco's quarterly conference call will be available online at www.otelco.net or www.earnings.com on August 9, 2007, beginning at 11:00 a.m. (Eastern Time). The online replay will be available at approximately 2:00 p.m. (Eastern Time) and continue for 30 days.

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, digital high-speed and dial-up Internet access, cable television and other telephone related services. With more than 66,000 access lines, cable modems and digital subscriber lines, which are collectively referred to as total access line equivalents, Otelco is among the top 40 largest local exchange carriers in the United States based on number of access lines. 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.