(ROSEVILLE, CALIFORNIA) - Integrated communications provider SureWest Communications (Nasdaq:SURW) reported net revenues of $47.4 million and net income of $0.7 million, or $0.05 per share, for the first quarter ended March 31, 2003.

This compares to net revenues of $43.5 million and net income of $5.6 million, or $0.37 per share in the first quarter of 2002, which included a one-time pre-tax gain of $4.4 million from the sale of the company's alarm monitoring assets.

"Our results in the first quarter of 2003 reflect our continuing commitment to creating value for our shareholders through a well-managed growth plan," said Brian Strom, President and Chief Executive Officer. "With nearly 17,000 DSL subscribers and over 15,000 'triple-play' Revenue Generating Units (RGUs), SureWest continues to translate best-in-class service and technology into long-term business success."

The increase in revenues over the first quarter of 2002 primarily reflects growth of more than $4.5 million in Broadband segment revenues and nearly $1.2 million in Wireless segment revenues. Telecom segment first quarter 2003 revenues were reduced by $0.3 million from the net effect of changes in accounting estimates relating to National Exchange Carrier Association (NECA) carrier common line accounts receivable and estimated shareable earnings obligations. In addition, the Company recorded a provision for shareable earnings obligations of $1.0 million during the first quarter of 2003.

Consolidated income from operations totaled $1.9 million in the first quarter of 2003, compared to $5.1 million in the first quarter of 2002. The difference primarily reflects higher year-over-year headcount and expenses associated with the addition of triple play services, and higher depreciation expense.

· Consolidated operating EBITDA, defined as income from operations plus depreciation and amortization, was $14.3 million in the first quarter of 2003 compared to $15.6 million a year ago. Lower year-over-year operating EBITDA margins reflect the start-up effects of Broadband's triple-play bundled service, which began in July 2002. However, operating EBITDA margins showed improvement over the preceding quarter ended December 31, 2002

· Local service revenues declined 9.2 percent in the first quarter of 2003 compared to the same period a year ago, primarily reflecting a reduction to revenues associated with higher intrastate estimated shareable earnings obligations, which was partially offset by local service revenue growth.

· Wireless revenues increased by 22.1 percent in the first quarter of 2003 to $6.5 million, which compares to $5.3 million in the same period of 2002, net of intersegment eliminations. Revenue growth reflects a 20.4 percent year-over-year increase in subscribers as SureWest continued to succeed with its aggressive niche-marketing campaigns. Subscriber growth also reflects the popularity of SureWest's new prepaid plans.

· Wireless operating EBITDA narrowed to a loss of $1.1 million in the first quarter of 2003, a sequential improvement of 45.0 percent and a year-over-year improvement of 68.6 percent. Margin improvement reflects economies of scale from higher subscriber counts, improved churn rates and effective cost controls.

· DSL customers totaled 16,843 at March 31, 2003, reflecting net adds of 1,195 in the first quarter of 2003 and a 37.6 percent increase in subscribers over the same period a year ago. SureWest's industry-leading DSL penetration, 17.8 percent of primary residential lines and 12.3 percent of ILEC access lines, is driven by rapid service deployment (typically two days or less), 100 percent DSL coverage in its service area, and aggressive marketing efforts.

· Triple play Revenue Generating Units (RGUs) totaled 15,042, reflecting 4,663 voice, 5,131 data and 5,248 video subscribers, as SureWest Broadband's market-leading digital bundle experienced high unit adoption rates in the Sacramento market. RGUs totaled 12,959 for the fourth quarter of 2002 and 11,923 in the third quarter of 2002 when SureWest launched triple play service. Churn was 1.4 percent in the first quarter of 2003, slightly lower than fourth-quarter 2002 churn of 1.5 percent.

Consolidated capital expenditures related to operations totaled $11.3 million in the first quarter of 2003, compared to $10.8 million in the first quarter of 2002. Capital expenditures for the remainder of 2003 are expected to total about $50 million, including approximately $21 million for triple-play capital expenditures. Cash and equivalents at March 31, 2003, were $69.8 million. Long-term debt, excluding the current portion at March 31, 2003, totaled $96.4 million. Cash and debt levels reflect SureWest's recently completed $60 million institutional placement of its 4.74 percent ten-year notes. The company believes that its cash and cash equivalents and funds from future operations will fully fund current plans for its emerging businesses.

SureWest paid $3.6 million in dividends in the first quarter of 2003, representing a quarterly payment of $0.25 per share. SureWest paid total dividends of $1.00 per share in 2002.

Non-GAAP Financial Measures

EBITDA is not a generally accepted accounting principle (GAAP) financial measure, and should be considered in addition to, and not as a substitute for or superior to, either net income determined in accordance with GAAP as an indicator of financial performance, nor cash flows from operating activities determined in accordance with GAAP as a measure of liquidity. SureWest believes that EBITDA is an appropriate measure because it permits greater comparability of the company's financial results against historical results and it is useful, particularly in the telecommunications sector, in helping investors assess the results of the Company's operations. Management uses EBITDA as an important indicator for planning and forecasting in future periods. A reconciliation of operating EBITDA to operating income, the most directly comparable GAAP measure, is provided in the table entitled "Operating EBITDA Reconciliation."

Conference call and Webcast

SureWest Communications will provide details about its results and business strategy, including the development of its emerging services on a conference call on Thursday, May 1, 2003 at 11:00 a.m., EDT. A simultaneous live webcast of the call will be available at www.surewest/investor.com and will be archived shortly after the conclusion of the call for replay through the first quarter of 2004. Additionally, a telephone replay of the call will be available through Monday, May 5, 2003 by calling 1-888-203-1112 and entering passcode 465089.

About SureWest Communications
With nearly 90 years in Northern California, SureWest Communications and its family of companies represent an integrated network of highly reliable advanced communications products and services with the highest standards of customer care. Founded as Roseville Telephone Company, the company has expanded to provide digital cable TV, fiber optics, PCS wireless, DSL, high-speed Internet access, data transport, local and long distance telephone service, and directories. For more information, visit the SureWest web site at www.surewest.com

Safe Harbor Statement

Statements made in this news release that are not historical facts are forward-looking statements and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to a number of risks, assumptions and uncertainties that could cause the company's actual results to differ from those projected in such forward-looking statements.

Important factors that could cause actual results to differ from those set forth in the forward-looking statements include, but are not limited to: advances in telecommunications technology, changes in the telecommunications regulatory environment, changes in competition in markets in which the company operates, the availability of future financing, changes in the demand for services and products, new product and service development and introductions, pending and future litigation and unanticipated changes in the growth of the company's emerging businesses, including the PCS, Internet and CLEC operating entities.

For more information, contact media@surewest.com.

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