Press Release

--Announces Completion of Alltel Transition--

Second Quarter 2011 Financial Highlights:

• Total revenues were $193.8 million
• Wireless service revenues were $166.0 million, or 86% of total revenues
• Adjusted EBITDA was $32.0 million
• Operating income was $6.3 million

BEVERLY, Mass.--(BUSINESS WIRE)-- Atlantic Tele-Network, Inc. (NASDAQ: ATNI), today reported results for the second quarter ended June 30, 2011 and announced the completion of the migration of its U.S. Wireless customer base to its own information technology systems and platforms.

"This was a period of significant accomplishment for ATN, as we completed the transition of our Alltel customers to our own operating platform, billing system and customer care centers in late July," said Michael Prior, Chief Executive Officer. "The completion of this conversion allows us to eliminate the overlapping expenses incurred under our Transition Services Agreement ("TSA") with Verizon that have negatively affected our results over the past several quarters. As anticipated, second quarter operating results included the largest expenses of our transition program, but resulted in only a modest sequential decline in margins for the period due to growth and cost efficiencies in other areas. We were also pleased to see continued improvement in many of our retail wireless operating metrics, including ARPU and churn, particularly on the postpaid side.

"While the residual impact of TSA payments and overlapping transition expenses incurred in July will affect our third quarter of 2011 costs, with the transition now complete we expect U.S. Wireless segment margins to progressively improve in the second half of this year."

Second Quarter 2011 Financial Results

Total revenues for the second quarter were $193.8 million, compared to $164.7 million for the second quarter of 2010. The 18% increase over last year's second quarter total revenues resulted primarily from the inclusion of a full quarter's operations of the former Alltel wireless assets that the Company acquired on April 26, 2010. Total wireless service revenues represented $166.0 million, or 86% of total revenue. U.S. Wireless service revenues were $147.3 million, or 76% of total revenues, for the quarter.

Adjusted EBITDA¹ for the 2011 second quarter was $32.0 million compared to $37.4 million in the 2010 second quarter and $35.4 million in the 2011 first quarter. Consistent with the past several quarters, second quarter 2011 U.S. Wireless segment results were impacted by significant costs associated with the transition of the acquired Alltel wireless assets. The Company estimates that duplicate transition-related expenses and the net impact of other one-time items were approximately $14.8 million in the second quarter as compared to $9.3 million in the first quarter of 2011. The Company estimates that these Alltel transition costs will be in the range of $5 million to $6 million during the third quarter of 2011, representing the last period in which the Company will incur these costs.

Total operating income was $6.3 million compared to $7.8 million in last year's second quarter and $10.4 million in the 2011 first quarter. Second quarter 2011 operating income included a $6.8 million increase in depreciation and amortization expenses over the prior year's second quarter and $0.3 million in acquisition-related charges. Last year's second quarter operating income included $11.0 million in acquisition-related charges due to the completion of the acquisition of Alltel wireless assets. Net income attributable to ATN's stockholders was $1.8 million, or $0.12 per diluted share, as compared to $24.8 million, or $1.60 per diluted share, in the second quarter of 2010 and $4.5 million, or $0.29 per share in the 2011 first quarter. Second quarter 2010 net income included a bargain purchase gain, net of taxes, of $27.0 million related to the Company's acquisition of former Alltel Wireless assets.

"Our ability to build a sustainable domestic retail customer base has been significantly enhanced by the migration of our customers to our new customer care and information technology platform," Mr. Prior noted. "While our focus continues to be on providing superior customer experience, network quality and coverage, we look forward to taking full advantage of the strong marketing expertise we have within our organization to launch new offerings and promotions customized for our subscribers' needs. Looking forward, we expect subscriber metrics and retail operating margins to progressively improve in the next few quarters as we work toward optimizing our service offerings and our cost structure.

"The merger of our Bermuda wireless business, CellOne, with M3 Wireless, a leading wireless provider in Bermuda, was also completed during the second quarter and is expected to be accretive before the end of 2011. A re-branding and new marketing campaign has been well received by customers, and we expect to see continuing growth in Island Wireless revenues as a result of the transaction," Mr. Prior noted.

Second Quarter 2011 Operating Highlights

U.S. Wireless Service Revenues

U.S. wireless service revenues include voice and data service revenues from the Company's prepaid and postpaid retail operations as well as its wholesale roaming operations. Total service revenues from the U.S. wireless businesses amounted to $147.3 million in the second quarter of 2011, compared to $121.1 million in the second quarter of 2010.

U.S. retail wireless service revenues were $95.4 million for the quarter ended June 30, 2011, a decrease of 4% from the $99.7 million reported in the quarter ended March 31, 2011. Service revenue declines in the second quarter were a result of a decline in the number of subscribers as the Company continued to experience net subscriber attrition through the transition period. At the end of the second quarter of 2011, the Company had approximately 639,000 U.S. retail subscribers, of which approximately 493,000 were postpaid subscribers and approximately 146,000 were prepaid subscribers. The Company acquired its U.S. retail wireless business on April 26, 2010, and revenue for this business for the quarter ended June 30, 2010 was $81.5 million. Additional operating data on our U.S. retail wireless business can be found in Table 4 of this release.

U.S. wholesale wireless revenues were $51.9 million, an increase of 31% over the $39.6 million reported in the second quarter of 2010. Data revenues accounted for 42% of wholesale wireless revenues for the quarter, compared to 24% a year earlier. Data volume growth and seasonality, as well as a slightly larger network coverage area, helped offset the impact of rate reductions for voice and data roaming such that wholesale revenue increased 16% over the first quarter of 2011. As expected, wholesale revenues in legacy "roam only" markets were impacted by revenue lost as a result of AT&T's acquisition and network conversion of certain former Alltel markets. The Company expects this network conversion to continue to negatively impact wholesale wireless revenues in coming quarters, although to an increasingly lesser degree than experienced in the second quarter of 2011.

International Wireless Revenues

International wireless revenues include retail and wholesale voice and data wireless revenues from international operations in Bermuda and the Caribbean, including the U.S. Virgin Islands. Total revenues from international wireless amounted to $18.7 million in the second quarter of 2011, an increase of $6.1 million, or 48%, over the $12.6 million reported in the second quarter of 2010. This increase resulted from the Company's merger with M3 Wireless, Ltd. on May 2, 2011, the acquisition of wireless operations in Aruba which occurred at the end of the second quarter of 2010, and growth in the number of wireless subscribers in Guyana and the U.S. Virgin Islands.

Wireline Revenues

Wireline revenues are generated by the Company's wireline operations in Guyana, including international telephone calls in and out of that country, its integrated voice and data operations in New England and its wholesale transport operations in New York State. Total revenues from wireline amounted to $20.9 million in the second quarter of 2011, a decrease of $2.3 million from $23.2 million reported in the second quarter of 2010. The decrease resulted from a decline in long distance revenue in Guyana, which was partially offset by data revenue growth in Guyana and growth in capacity sales in New York State.

Reportable Operating Segments

The Company has four reportable segments: i) U.S. Wireless, ii) International Integrated Telephony, which operates in Guyana, iii) Island Wireless, which generates its revenues and has its assets located in Bermuda and the Caribbean and iv) U.S. Wireline. Financial data on our reportable operating segments for the three months ended June 30, 2011 are as follows:

Information about our operating segments for the three months ended June 30, 2011 is as follows:
		U.S. Wireless			International Integrated Telephony			Island Wireless				U.S. Wireline			Reconciling Items 1				Total
Total Revenue		$	153,248		$	22,751		$	12,681			$	5,073		$	-			$	193,753
Adjusted EBITDA			23,870			11,197			216				842			(4,162	)			31,963
Operating Income (Loss)			6,507			6,640			(2,440	)			51			(4,481	)			6,277

(1) Reconciling items are comprised of corporate general and administrative costs and acquisition-related charges.

Balance Sheet and Cash Flow Highlights

Cash and cash equivalents at June 30, 2011 were $46.8 million. Long-term debt was $289.7 million. For the second quarter, net cash provided by operating activities was $22.0 million and was $43.0 million for the first half of 2011. Second quarter capital expenditures were $29.2 million, and $45.4 million for the first half of 2011. Consistent with previous indications, the Company expects full year 2011 capital expenditures to approximate $105 to $120 million, of which $70 to $80 million is expected to be allocated to the U.S. Wireless segment.

Conference Call Information

Atlantic Tele-Network will host a conference call tomorrow, Wednesday, August 3, 2011 at 9:30 a.m. Eastern Time (ET) to discuss its second quarter results for 2011. The call will be hosted by Michael Prior, President and Chief Executive Officer, and Justin Benincasa, Chief Financial Officer. The dial-in numbers are US/Canada: 877-734-4582 and International: 678-905-9376, conference ID 85140968. A replay of the call will be available at ir.atni.com beginning at 1:00 p.m. (ET)August 3, 2011.

About Atlantic Tele-Network

Atlantic Tele-Network, Inc. (NASDAQ:ATNI), headquartered in Beverly, Massachusetts, provides telecommunications services to rural, niche and other under-served markets and geographies in the United States, Bermuda and the Caribbean. Through our operating subsidiaries, we provide both wireless and wireline connectivity to residential and business customers, including a range of mobile wireless solutions, local exchange services and broadband internet services and are the owner and operator of terrestrial and submarine fiber optic transport systems. For more information, please visit www.atni.com.

Cautionary Language Concerning Forward Looking Statements

This press release contains forward-looking statements relating to, among other matters, our future financial performance and results of operations; the competitive environment in our key markets, demand for our services and industry trends; the outcome of regulatory matters; our continued access to the credit and capital markets; the pace of our network expansion and improvement, including our level of estimated future capital expenditures and our realization of the benefits of these investments; and management's plans and strategy for the future. These forward-looking statements are based on estimates, projections, beliefs, and assumptions and are not guarantees of future events or results. Actual future events and results could differ materially from the events and results indicated in these statements as a result of many factors, including, among others, (1) the general performance of our operations, including operating margins, and the future retention and turnover of our subscriber base; (2) our ability to maintain favorable roaming arrangements; (3) increased competition; (4) economic, political and other risks facing our foreign operations; (5) the loss of certain FCC and other licenses and other regulatory changes affecting our businesses; (6) rapid and significant technological changes in the telecommunications industry; (7) any loss of any key members of management; (8) our reliance on a limited number of key suppliers and vendors for timely supply of equipment and services relating to our network infrastructure and retail wireless business; (9) the adequacy and expansion capabilities of our network capacity and customer service system to support our customer growth; (10) the occurrence of severe weather and natural catastrophes; (11) our continued access to capital and credit markets; and (12) our ability to realize the value that we believe exists in businesses that we may or have acquired. These and other additional factors that may cause actual future events and results to differ materially from the events and results indicated in the forward-looking statements above are set forth more fully under Item 1A "Risk Factors" of the Company's Annual Report on Form 10-K for the year ended December 31, 2010, filed with the SEC on March 16, 2011. The Company undertakes no obligation to update these forward-looking statements to reflect actual results, changes in assumptions or changes in other factors that may affect such forward-looking statements.

Use of Non-GAAP Financial Measures

In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), this news release also contains non-GAAP financial measures. Specifically, ATN has presented Adjusted EBITDA and ARPU measures. Adjusted EBITDA is defined as net income attributable to ATN, Inc. stockholders before interest, taxes, depreciation and amortization, acquisition related charges, other income, bargain purchase gain, net income attributable to non-controlling interests, and equity in earnings of unconsolidated affiliates. ARPU, or monthly average revenue per subscriber/unit, is computed by dividing total retail service revenues per period by the weighted average number of subscribers with service during that period, and then dividing that result by the number of months in the period. The Company believes that the inclusion of these non-GAAP financial measures helps investors to gain a meaningful understanding of the Company's core operating results and enhance comparing such performance with prior periods, without the distortion of the recent increased expenses associated with the Alltel transaction. ATN's management uses these non-GAAP measures, in addition to GAAP financial measures, as the basis for measuring our core operating performance and comparing such performance to that of prior periods. The non-GAAP financial measures included in this news release are not meant to be considered superior to or a substitute for results of operations prepared in accordance with GAAP. Reconciliations of the non-GAAP financial measures used in this news release to the most directly comparable GAAP financial measures are set forth in the text of, and the accompanying tables to, this press release.

¹ See Table 5 for reconciliation of Net Income to Adjusted EBITDA.

Table 1
ATLANTIC TELE-NETWORK, INC.
Unaudited Condensed Consolidated Balance Sheets
(in Thousands)
		June 30,			December 31,
		2011			2010
Assets:
Cash and Cash Equivalents		$	46,777		$	37,330
Other Current Assets			123,832			116,959
Total Current Assets			170,609			154,289
Fixed Assets, net			474,959			463,891
Goodwill and Other Intangible Assets, net			194,281			187,762
Other Assets			23,994			22,254
Total Assets		$	863,843		$	828,196
Liabilities and Stockholders' Equity:
Current Portion of Long Term Debt		$	17,791		$	12,194
Other Current Liabilities			122,871			126,108
Total Current Liabilities			140,662			138,302
Long Term Debt, Net of Current Portion			289,691			272,049
Other Liabilities			87,353			88,809
Total Liabilities			517,706			499,160
Total Atlantic Tele-Network, Inc.'s Stockholders' Equity			288,061			283,768
Non-Controlling Interests			58,076			45,268
Total Equity			346,137			329,036
Total Liabilities and Stockholders' Equity		$	863,843		$	828,196

Table 2
ATLANTIC TELE-NETWORK, INC.
Unaudited Condensed Consolidated Statements of Operations
(in Thousands, Except per Share Data)
		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2011				2010 (a)				2011 (a)				2010 (a)
Revenues:
U.S. Wireless Services:
Retail		$	95,410			$	81,503			$	195,079			$	81,503
Wholesale			51,870				39,550				96,567				62,486
International Wireless			18,714				12,575				33,657				23,492
Wireline			20,886				23,230				41,557				43,751
Equipment and Other			6,873				7,831				15,048				8,288
Total Revenue			193,753				164,689				381,908				219,520
Operating Expenses:
Termination and Access Fees			54,757				44,590				106,662				55,812
Engineering and Operations			21,897				17,893				43,802				24,337
Sales, Marketing and Customer Service			36,400				23,804				68,508				27,198
Equipment Expense			17,964				17,585				39,156				18,298
General and Administrative			30,773				23,460				56,386				34,234
Acquisition-Related Charges			316				11,041				567				15,834
Depreciation and Amortization			25,369				18,542				50,160				28,611
Total Operating Expenses			187,476				156,915				365,241				204,324
Operating Income			6,277				7,774				16,667				15,196
Other Income (Expense):
Interest Income (Expense), net			(4,150	)			(2,303	)			(7,842	)			(3,416	)
Other Income			4				226				599				230
Equity in Earnings of Unconsolidated Affiliates			239				290				755				290
Bargain Purchase Gain, net of taxes of $18,016			-				27,024				-				27,024
Other Income (Expense), net			(3,907	)			25,237				(6,488	)			24,128
Income Before Income Taxes			2,370				33,011				10,179				39,324
Income Taxes			1,052				7,969				4,882				10,425
Net Income			1,318				25,042				5,297				28,899
Net Loss (Income) Attributable to Non-Controlling Interests, net of tax			497				(238	)			1,015				(90	)
Net Income Attributable to Atlantic Tele-Network, Inc. Stockholders		$	1,815			$	24,804			$	6,312			$	28,809
Net Income Per Weighted Average Share Attributable to Atlantic Tele-Network, Inc. Stockholders:
Basic		$	0.12			$	1.62			$	0.41			$	1.89
Diluted		$	0.12			$	1.60			$	0.41			$	1.86
Weighted Average Common Shares Outstanding:
Basic			15,394				15,300				15,389				15,280
Diluted			15,497				15,478				15,491				15,463
a) Certain reclassifications have been made to prior period amounts to conform to the current presentation

Table 3
ATLANTIC TELE-NETWORK, INC.
Unaudited Condensed Consolidated Cash Flow Statement
(in Thousands)
		Six Months Ended June 30,
			2011				2010
Net Income		$	5,297			$	28,899
Gain on Bargain Purchase, Net of Tax			-				(27,024	)
Depreciation and Amortization			50,160				28,611
Change in Working Capital			(18,412	)			19,549
Other			5,984				10,703
Net Cash Provided by Operating Activities			43,029				60,738
Capital Expenditures			(45,428	)			(51,995	)
Acquisitions of Businesses, Net of Cash Acquired			-				(221,306	)
Cash Acquired in Business Combinations			4,087				-
Other			467				2,805
Net Cash Used by Investing Activities			(40,874	)			(270,496	)
Borrowings Under Credit Facility			23,095				190,000
Principal Repayments of Long Term Debt			(6,516	)			(3,721	)
Payment of Debt Issuance Costs			(931	)			(3,053	)
Dividends Paid on Common Stock			(6,771	)			(6,111	)
Distributions to Non-Controlling Interests			(1,607	)			(861	)
Other			22				902
Net Cash Used by Financing Activities			7,292				177,156
Net Change in Cash and Cash Equivalents			9,447				(32,602	)
Cash and Cash Equivalents, Beginning of Period			37,330				90,247
Cash and Cash Equivalents, End of Period		$	46,777			$	57,645

Table 4
ATLANTIC TELE-NETWORK, INC.
Operating Data for U.S. Retail Wireless Operations
Three Months Ended:		JUN 2010		SEP 2010		DEC 2010		MAR 2011		JUN 2011
		827,370		807,327		766,556		717,745		674,080
Beginning Subscribers
Prepay		242,385		230,334		216,854		194,795		169,673
Postpay		584,985		576,993		549,702		522,950		504,407
Gross Additions		44,208		64,118		51,882		46,680		38,859
Prepay		25,892		37,527		27,136		19,922		13,951
Postpay		18,316		26,591		24,746		26,758		24,908
Net Additions		(20,043)		(40,771)		(48,811)		(43,665)		(35,241)
Prepay		(12,051)		(13,480)		(22,059)		(25,122)		(23,819)
Postpay		(7,992)		(27,291)		(26,752)		(18,543)		(11,422)
Ending Subscribers		807,327		766,556		717,745		674,080		638,839
Prepay		230,334		216,854		194,795		169,673		145,854
Postpay		576,993		549,702		522,950		504,407		492,985

Note: Beginning subscribers for quarter ended June 30, 2010 are as of April 30, 2010 following the close of the Alltel transaction on April 26, 2010.

ATLANTIC TELE-NETWORK, INC.
U.S. Retail Wireless Operations Key Performance Indicators
Three Months Ended:		JUN 2010		SEP 2010		DEC 2010		MAR 2011		JUN 2011
Average Subscribers (weighted monthly)		821,637		786,295		741,228		695,399		655,292
Monthly Average Revenues per Subscriber/Unit (ARPU)
● Subscriber ARPU		$45.13		$45.67		$45.88		$47.23		$47.90
● Postpaid Subscriber ARPU		$53.85		$53.81		$53.71		$53.78		$54.47
Monthly Postpay Subscriber Churn		2.24%		3.16%		3.18%		2.93%		2.42%
Monthly Blended Subscriber Churn		3.85%		4.41%		4.48%		4.29%		3.73%

Table 5
ATLANTIC TELE-NETWORK, INC.
Reconciliation of Non-GAAP Measures
(In Thousands)
Reconciliation of Net Income to Adjusted EBITDA for the Three Months Ended June 30, 2010 and 2011
Three Months Ended June 30, 2010
		U.S Wireless			International Integrated Telephony			U.S. Wireline				Island Wireless				Reconciling Items				Total
Net Income Attributable to Atlantic Tele-Network, Inc. Stockholders																				$	24,804
Net Income Attributable to Non-Controlling Interests, net of tax																					238
Income Taxes																					7,969
Equity in Earnings of Unconsolidated Affiliates																					(290	)
Other Income																					(226	)
Bargain Purchase Gain, net of taxes of $18,016																					(27,024	)
Interest Expense, net																					2,303
Operating Income (Loss)		$	16,834		$	7,899		$	3			$	(586	)		$	(16,376	)		$	7,774
Depreciation and Amortization			12,527			4,245			727				965				78				18,542
Acquisition-Related Charges			-			-			-				-				11,041				11,041
Adjusted EBITDA		$	29,361		$	12,144		$	730			$	379			$	(5,257	)		$	37,357
Three Months Ended June 30, 2011
		U.S Wireless			International Integrated Telephony			U.S. Wireline				Island Wireless				Reconciling Items				Total
Net Income Attributable to Atlantic Tele-Network, Inc. Stockholders																				$	1,815
Net Loss Attributable to Non-Controlling Interests, net of tax																					(497	)
Income Taxes																					1,052
Equity in Earnings of Unconsolidated Affiliates																					(239	)
Other Income																					(4	)
Interest Expense, net																					4,150
Operating Income (Loss)		$	6,507		$	6,640		$	51			$	(2,440	)		$	(4,481	)		$	6,277
Depreciation and Amortization			17,363			4,557			791				2,438				220				25,369
Acquisition-Related Charges			-			-			-				218				99				317
Adjusted EBITDA		$	23,870		$	11,197		$	842			$	216			$	(4,162	)		$	31,963

Atlantic Tele-Network, Inc.
Michael T. Prior, 978-619-1300
Chief Executive Officer
or
Justin D. Benincasa, 978-619-1300
Chief Financial Officer

Source: Atlantic Tele-Network, Inc.

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