News Release: October 31, 2002
SUREWEST COMMUNICATIONS REPORTS THIRD QUARTER 2002 RESULTS

(Roseville, California) - Integrated communications provider SureWest Communications ("SureWest") (Nasdaq:SURW) announced financial results today for the quarter ended September 30, 2002.

SureWest reported quarterly operating revenues of $52.3 million, up 29.8 percent from $40.3 million in the third quarter of 2001. Revenue growth reflects a 1.9 percent increase in regulated access lines and higher DSL revenues, Wireless revenue growth and $3.3 million of additional revenue from digital cable, competitive local exchange (CLEC) services and internet service. Revenues increased due to a change in regulatory shareable obligations related to the regulatory structure under which the company's incumbent local exchange carrier (ILEC), Roseville Telephone Company, operates.

Consolidated operating EBITDA, or income from operations plus depreciation and amortization, was $19.0 million in the third quarter of 2002, compared to $11.7 million in the third quarter of 2001, a 62.4 percent increase. Operating EBITDA results reflect contributions from Telecom operations offset by operating losses from Wireless services.

Consolidated operating income was $7.0 million in the third quarter of 2002, compared to $1.6 million in the third quarter of 2001. Net income for the third quarter of 2002 was $3.9 million, or $0.26 per share, compared to $1.4 million, or $0.09 per share, in the third quarter of 2001. Net income excluding a change to estimated regulatory shareable obligations was $0.06 per share in the third quarter of 2002.

Consolidated quarterly operating expenses were $45.3 million, compared to $38.7 million in the comparable period last year, an increase of 17.1 percent. The increase is partly due to added personnel from the acquisition of QuikNet, now SureWest Custom Data Services, in the third quarter of 2001, and the purchase in the third quarter of 2002 of digital cable assets formerly operated by Western Integrated Networks. SureWest's employees numbered 957 at the end of the third quarter of 2002 versus 795 a year ago.

Consolidated results for the nine-month period ended September 30, 2002, are as follows: revenues totaled $140.1 million, up 15.9 percent from September 30, 2001; operating EBITDA increased 30.3% to $48.6 million; operating income was $15.2 million, 85.4 percent higher than the third quarter last year; and net income totaled $11.2 million, or $0.75 per share, 41.8 percent higher than the nine months ended September 30, 2001.

Operating results:

Revenues in SureWest's Telecom segment, which includes ILEC, directory advertising, long distance, digital cable, CLEC and internet service, were $46.4 million in the third quarter of 2002, an increase of 25.1 percent over $37.1 million in the same quarter last year. Telecom operating EBITDA totaled $21.7 million, which compares to $17.2 million in the third quarter of 2001, a 26.2 percent increase. Operating income totaled $13.6 million, up 37.4 percent over $9.9 million in the third quarter last year. The revenue increase is primarily due to higher revenue from digital cable, CLEC and internet services and a $7.9 million increase in network access revenues. Results also reflect a change to estimated shareable revenues for the years 1999 through 2001 that increased revenues by $5.1 million and net income by $3.0 million.

Roseville Long Distance, SureWest's long-distance reseller, generated quarterly revenue of $1.5 million, the same as the third quarter of 2001. Growth in long distance lines was offset by the absence of long distance revenue from alarm monitoring, which was sold in January 2002. Revenue from directory advertising was basically unchanged from a year ago at $3.6 million in the third quarter of 2002.

SureWest Wireless reported third-quarter 2002 revenue of $5.9 million, an increase of 78.8 percent over revenue of $3.3 million in the same period last year. Wireless operating EBITDA loss totaled $2.7 million, compared to a loss of $5.5 million in the same period last year, a 50.9 percent improvement. Results reflect strong contract subscriber net additions. SureWest Wireless provides its 38,000 subscribers flat-rate unlimited service on a digital CDMA network in sixteen northern California counties with a population of 3.3 million and covered population of 2.5 million.

Capital expenditures were $20.5 million in the third quarter of 2002, which includes $12.3 million of capitalized costs associated with the purchase of digital cable assets from Western Integrated Networks. Capital expenditures were $12.5 million in the same period last year. Through nine months ended September 30, 2002, capital expenditures totaled $47.1 million including the capitalized costs just described, compared to $48.7 million through the same period last year. The year-over-year decrease in capital expenditures related to operations reflects buildout maturation in the Wireless and CLEC businesses, offset by planned capital expenditures in the digital cable business. SureWest also paid $3.6 million in dividends in the third quarter of 2002, representing a quarterly payment of $0.25 per share.

Planned capital expenditures for digital cable in the fourth quarter of 2002 are approximately $3 million. Digital cable capital expenditures for all of 2003 are currently projected to be $22 million, and consolidated capital expenditures in 2003 are projected to be $57 million.

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"Our results illustrate that SureWest can deliver strong margins and cash-flows in its established businesses while managing the growth of its emerging businesses for future returns on investment," said Brian Strom, president and chief executive officer of SureWest Communications. "We were particularly pleased with access-line additions in the ILEC that exceeded our expectations and strong revenue growth in emerging services."

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SureWest Communications will provide additional detail about its results and business strategy, including the development of its emerging services on a conference call today, October 31, 2002 at 10:00 AM EDT. A live webcast of the call will be available at www.surewest.com and will be archived for replay. Additionally, a telephone replay of the call will be available through November 6, 2002 by calling 1-888-203-1112 and entering passcode 296575.

About SureWest

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.

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.

SUREWEST COMMUNICATIONS

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Amounts in thousands, except per share amounts)

	Quarter	Quarter	Nine Months	Nine Months
	Ended	Ended	Ended	Ended
	September 30, 2002	September 30, 2001	September 30, 2002	September 30, 2001
	------------	-----------	------------	------------
Operating revenues:
Local service	$16,918	$16,929	$50,479	$48,785
Network access service	19,321	11,389	45,524	34,263
Wireless service	5,917	3,267	17,377	12,054
Directory advertising	3,600	3,598	10,954	10,894
Nonregulated sales and service	1,502	1,725	4,140	5,124
Other	5,088	3,410	11,629	9,798
	-------	-------	-------	--------
Total operating revenues	52,346	40,318	140,103	120,918
Operating expenses:
Cost of services and products	16,096	14,938	44,694	41,488
Customer operations and selling	8,578	7,459	24,593	23,847
General and administrative	8,703	6,215	22,197	18,268
Depreciation and amortization	11,943	10,087	33,417	29,141
				--------
Total operating expenses	45,320	38,699	124,901	112,744
				--------
Income from operations	7,026	1,619	15,202	8,174
Other income (expense):
Interest income	60	785	488	4,326
Interest expense	(535)	(15)	(1,234)	(334)
Gain on sale of alarm
monitoring assets	-	-	4,435	-
Other, net	(131)	(27)	(238)	997
	-------	-------	-------	-------
Total other income (expense),
Net	(606)	743	3,451	4,989
Income before income taxes	6,420	2,362	18,653	13,163
Income taxes	2,568	915	7,489	5,255
		-------		-------
Net income	$ 3,852	$1,447	$11,164	$ 7,908
	=======	========	=======	=======
Basic and diluted earnings per
share (1):	$.26	$.09	$.75
Cash dividends per share (2)	$.25	$.25	$.75
	=======	========	=======	=======
Shares of common stock used to
calculate earnings per share	14,534	15,290	14,870	15,366
	=======	========	=======	=======

Shares used in the computation of basic earnings per share are based on the weighted average number of common shares outstanding, excluding unvested restricted common shares. Shares used in the computation of diluted earnings per share are based on the weighted average number of common and other potentially dilutive securities outstanding in each period.

Cash dividends per share are based on the actual dividends per share, as declared by the Company's Board of Directors.

SUREWEST COMMUNICATIONS

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Amounts in thousands)

	September 30, 2002	December 31, 2001
	--------------	-----------------
ASSETS
Current assets:
Cash and cash equivalents	$ 16,641	$54,520
Short-term investments	-	1,723
Accounts receivable, net	24,068	20,282
Refundable income tax	9,769	2,619
Inventories	3,501	3,324
Deferred income tax asset	641	640
Deferred directory costs	3,729	3,260
Prepaid expenses and other current assets	2,885	1,726
	--------	--------
Total current assets	61,234	88,094
Property, plant and equipment, net	323,901	308,073
Investments and other assets:
Wireless licenses, net	13,566	13,566
Goodwill	2,171	2,171
Deferred charges and other assets	416	439
	--------	--------
	16,153	16,176
	--------	--------
	$401,288	$412,343
	========	========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings	$ 15,000	$      -
Current portion of long-term debt	2,143	2,143
Accounts payable and accrued liabilities	8,470	11,093
Estimated shareable earnings obligations	10,943	16,597
Advance billings and deferred revenues	8,657	8,144
Accrued pension cost	3,000	6,551
Accrued compensation	5,466	4,218
	--------	--------
Total current liabilities	53,679	48,746
Long-term debt	40,536	42,142
Deferred income tax	24,197	11,206
Other liabilities and deferred revenues	9,404	8,456
Shareholders' equity:
Common Stock, without par value;
100,000 shares authorized,14,529 and
15,110 shares issued and
outstanding at September 30, 2002 and
December 31, 2001, respectively	157,876	172,083
Deferred stock-based compensation	(146)	(303)
Retained earnings	115,742	130,013
	--------	--------
Total shareholders' equity	273,472	301,793
	--------	--------
	$401,288	$412,343
	========	========

Selected Financial Information

(Unaudited)

(Amounts in thousands, except per share amounts)

	Quarter	Quarter		Nine Mos.	Nine Mos.
	Ended	Ended		Ended	Ended
	Sept 30, 2002	Sept 30, 2001	Pct Change	Sept 30, 2002	Sept 30, 2001	Pct Change
	---------	--------	------	--------	--------	------
Operating revenues:
Telecom	$46,429	37,051	25.3%	122,726	108,864	12.7%
Wireless	5,917	3,267	81.1%	17,377	12,054	44.2%
	-------	-------		------	-------
Total operating revenues	52,346	40,318	29.8%	140,103	120,918	15.9%
Operating EBITDA (1):
Telecom	$21,695	$17,211	26.1%	$56,680	$50,459	12.3%
Wireless	($2,726)	($5,505)	-50.5%	($8,061)	($13,144)	-38.7%
	------	-------		------	------
Total operating EBITDA	18,969	11,706	62.0%	48,619	37,315	30.3%

Operating EBITDA represents income from operations plus depreciation and amortization and is a common measure of operating performance in the telecommunications industry.  Operating EBITDA is not a measure of financial performance under generally accepted accounting principles and should not be construed as a substitute for consolidated net income as a measure of performance.

Selected Operating Statistics

	As of and for the nine months ended
	September 2002	September 2001	Pct Change
TELECOM
ILEC access lines	137,100	134,600	1.9%
ILEC voice-grade equivalents	339,000	282,000	20.2%
ILEC fiber miles	31,000	30,000	3.3%
DSL subscribers	14,300	9,000	58.9%
Long distance lines	39,000	32,000	21.9%
Broadband fiber miles	20,000	19,000	5.3%
ISP and custom data subscribers	18,900	9,600	96.9%
Digital cable customers	5,300	-
Digital cable ARPU (1)	$105	-
Digital cable churn	2.1%	-
WIRELESS
Subscribers	37,900	29,000	30.7%
POPs	3,300,000	3,300,000	0.0%
POPs covered	2,500,000	1,800,000	38.9%
Contract churn (2)	3.7%	3.7%	0.0%
ARPU(3)	$47.06	$28.76	63.6%

Average revenue per user (ARPU) per month.

Monthly turnover in contract customers.

Wireless average monthly revenue per subscriber is monthly revenue excluding equipment and insurance revenues. ARPU in the third quarter last year was negatively affected by prepaid churn and customer collection problems.

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For more information, contact media@surewest.com.

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