Mr. Curtis Garner reports

OTELCO DECLARES DISTRIBUTION PAYMENT TO IDS HOLDERS

Otelco Inc.'s board of directors has declared a distribution of 42 cents per income deposit security (each an IDS), which will be made on Dec. 30, 2011, to holders of record at the close of business on Dec. 15, 2011. The distribution represents the 28th consecutive quarterly distribution since the company completed its initial public offering in December, 2004.

Each IDS is composed of one share of common stock and $7.50 principal amount of 13-per-cent senior subordinated notes due 2019.

The distribution consists of a dividend of 17.625 cents per share of common stock and an interest payment on the senior subordinated notes for the period from Sept. 30, 2011, through Dec. 29, 2011, of 24.375 cents per note. Currently, it is anticipated that the company's dividends will continue to be treated as a return of capital for shareholder tax purposes in 2011 as they were in 2008, 2009 and 2010.