1288359--3/15/2007--OTELCO_INC.

related topics
{capital, credit, financial}
{regulation, government, change}
{condition, economic, financial}
{system, service, information}
{personnel, key, retain}
{debt, indebtedness, cash}
{acquisition, growth, future}
{competitive, industry, competition}
Our business is concentrated geographically and dependent on regional economic conditions. The telecommunications industry has experienced increased competition. We may not be able to integrate new technologies and provide new services in a cost-efficient manner. We may have difficulty acquiring businesses, managing growth and integrating acquired businesses. Disruptions in our networks and infrastructure may cause us to lose customers and incur additional expenses. Our success depends on a small number of key personnel. We provide services to our customers over access lines, and if we lose access lines, our business and results of operations may be adversely affected. Our performance is subject to a number of other economic and non-economic factors, which we may not be able to predict accurately. Changes in the regulation of the telecommunications industry could adversely affect our business, revenue or cash flow. Governmental authorities could decrease network access charges or rates for local services, which would adversely affect our revenue. A reduction in Universal Service Fund High Cost support would adversely affect our business, revenue and cash flow. If we were to lose our protected status under interconnection rules, we would incur additional administrative and regulatory expenses and face more competition. Changes in the regulation of cable television franchises and services may adversely impact our cable television operations. Our current dividend policy may negatively impact our ability to maintain or expand our network infrastructure and finance capital expenditures or operations. We are subject to restrictive debt covenants that limit our business flexibility by imposing operating and financial restrictions on our operations.

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