Enterprise Segment Revenue Increased 44 percent Compared to Second

Quarter 2007

Wireless Data ARPU up 60%

Prior Year Financials Include Favorable $2.5 million Access Revenue

Settlement

Reduces 2008 Annual Guidance for Revenue by 1.3% and Recurring EBITDA

by 1.5%

ANCHORAGE, Alaska–(EMWNews)–Alaska Communications Systems Group, Inc. (“ACS”)

(NASDAQ: ALSK) today reported financial results for its second quarter

ended June 30, 2008.

“Bold strategic investments and quality

execution continue to position ACS as the state’s

best provider focused on delivering superior voice and data wireless

services and world-class wireline solutions built for sophisticated

enterprise customers,” said Liane Pelletier,

ACS president, chief executive officer and chairman.

“Wireless has gone through a momentous shift

this year. We simultaneously repositioned our operations for long-term

competitiveness with the entry of a national brand, at&t; we completed

our migration from TDMA to all CDMA; and we recently upgraded our

network to provide the fastest data speeds in the nation via EVDO Rev A.

As evidenced by our operating metrics, the plans were right and the

execution was solid. Wireless gross adds in the second quarter were

higher than in any of the prior six quarters and churn among our

postpaid subscribers (94% of all subscribers) improved to a 1.5% monthly

level. ACS grew most in the high-quality subscriber segments with

unlimited voice calling plans and data cards accounting for 30% of

quarterly gross adds. Data ARPU increased 60% to $4.59,”

added Pelletier.

“We have also been positioning for success in

the enterprise segment. Enterprise revenues are up 44% this quarter over

a year ago and the sales funnel is very strong. We have hired new and

trained existing employees to serve enterprise customers. We have added

over 100 new fiber entrance facilities to buildings in the metro areas.

We have upgraded and extended our differentiated Metro Ethernet and MPLS

networks. We will execute a contract this week for a second NOCC in the

lower 48 to provide business continuity, world-class network management

and customer interfaces – all timed for the

turn up of AKORN. The AKORN cable build is on schedule and ACS obtained

final regulatory approval for its acquisition of Crest. These are just a

few of the transformative actions taking place –

making what was once a collection of local telephone assets into a 21st

century wireline network built to serve the needs of enterprise

customers,” concluded Pelletier.

Financial Highlights: Second Quarter 2008 Compared to Second Quarter

2007

• Revenues of $94.4 million were in line with 2007 revenues of $94.5

  million

								— Wireless and Enterprise revenues were up $4.3M
								— Retail wireline revenues were roughly flat
								— Wholesale and network access revenues were down $4.2M

• EBITDA of $31.0 million, exclusive of $0.6 million in start up costs

  for our long-haul investments, was down from 2007 EBITDA of $33.6

  million

								— One-time network access settlements of $2.5 million in 2007 did not reoccur in 2008
								— ACS’ reset of wireless voice prices to national price levels drove an impact of $1.3 million. This resulted from the company’s proactive response to at&t’s entry into Alaska.

• Operating income of $9.7 million compared to $13.4 million in the

  prior year.

• Net cash provided by operating activities of $14.9 million compared to

  $19.0 million in the prior year.

• Net income of $0.9 million, or $0.02 per diluted share, compared to

  $6.2 million, or $0.14 per diluted share in the prior year.

  Comparative EPS performance was impacted by higher non-cash

  depreciation and asset disposal charges; interest expense on our new

  $125 million convertible debt offering; and book tax expense this year

  but not last.

“We are changing our year-end guidance to

reflect the impact from faster-than-anticipated wireless customer

conversion to national rate plans, the longer sales cycles for some of

the enterprise customers expected to make purchase decisions later in

2008 than originally anticipated, and the uncertainty surrounding the

CETC cap,” said David Wilson, chief financial

officer.

“The strength in wireless operating metrics

demonstrate that programs are positioning us to profitably scale the

business. In enterprise, we have significant traction in building a

profitable book of business and we look forward to sharing our success

in the coming quarters,” added Wilson.

Metric Highlights: Second Quarter 2008 Compared to First Quarter 2008

• Wireless subscribers increased by approximately 2.5 percent, or 3,600,

  to 148,700.

• Average retail wireless monthly churn of 1.7 percent was down from 1.9

  percent. Post paid wireless churn improved by 30 basis points to 1.5%.

• Retail wireless ARPU of $60.51, inclusive of CETC revenue of $10.39,

  was down $0.61. Data ARPU contributed $4.59, up 22 percent.

• DSL lines remained flat at approximately 47,950. ISP ARPU was up

  $0.78, or 2.6 percent, driven by improved mix and migration to higher

  speeds.

• Retail local access lines declined by 1.0 percent to 180,500.

• Total local access lines decreased by approximately 5,600, or 2.6

  percent, to 214,200.

Six Month Financial Review

For the six months ended June 30, 2008, total revenues were $191.1

million, which represented a 2.7 percent increase over revenues of

$186.1 million for the same period last year. Net income for the six

months ended June 30, 2008, inclusive of book income tax expense of $4.9

million, was $6.7 million, or $0.15 per diluted share, compared to net

income of $13.5 million, or $0.31 per share, in the same period in 2007.

Net cash provided by operating activities for the first half of 2007 was

$39.8 million, as compared to $47.0 million in the same period in 2007.

Excluding $0.8 million in start up costs for our long-haul fiber

investments, EBITDA for the six months ended June 30, 2008 was $66.1

million, compared to $66.9 million in the same period last year.

2008 Business Outlook

For the full-year 2008, ACS is changing its revenue and EBITDA guidance.

Revenues are now expected to be in the range of $380 million to $390

million versus prior guidance of $385 million to $395 million; EBITDA,

excluding start up costs, to be in the range of $128 million to $132

million versus prior guidance of $130 million to $134 million; and the

start up costs for its long haul fiber investments is now expected to be

approximately $4 million versus its prior guidance of $6 million. The

company is maintaining its prior guidance of $42 million for maintenance

capex; $82 million for capex for AKORN; and $33 million for net cash

interest expense.

Conference Call

The company will host a conference call and live webcast today at 5:00

p.m. Eastern Time. Parties in the United States and Canada can call

800-257-6607 to access the conference call. Parties outside the United

States and Canada can access the call at 303-228-2961. The live webcast

of the conference call will be accessible from the “Events

Calendar” section of the company’s

website (www.alsk.com). The webcast

will be archived for a period of 90 days. A telephonic replay of the

conference call will also be available 2 hours after the call and will

run until Thursday, August 7, 2008 at midnight ET. To hear the replay,

parties in the United States and Canada can call 800-405-2236 and enter

pass code 11117721. Parties outside the United States and Canada can

call 303-590-3000 and enter pass code 11117721.

About Alaska Communications Systems

Headquartered in Anchorage, ACS is Alaska’s

leading provider of broadband and other wireline and wireless solutions

to Enterprise and mass market customers. The ACS wireline operations

include the state’s most advanced data

networks and, to be launched in early 2009, the only diverse undersea

fiber optic system connecting Alaska to the contiguous United States.

The ACS wireless operations include the only statewide 3G CDMA network,

reaching across Alaska from the North Slope to Ketchikan, with coverage

extended via best-in-class CDMA carriers in the Lower 49 and Canada. By

investing in the fastest-growing market segments and attracting the

highest-quality customers, ACS seeks to drive top- and bottom-line

growth, while continually improving customer experience and cost

structure through process improvement. More information can be found on

the company’s website at www.acsalaska.com

or at its investor site at www.alsk.com.

Forward-Looking EBITDA Guidance

This press release includes information related to management’s

estimate of EBITDA for the year ending December 31, 2008. EBITDA, as

defined by the company, may not be similar to EBITDA measures used by

other companies and is not a measurement under generally accepted

accounting principles (GAAP). Management believes that EBITDA provides

useful information to investors about the company’s performance because

it eliminates the effects of period-to-period changes in costs

associated with capital investments, interest and stock-based

compensation expense that are not directly attributable to the

underlying performance of the company’s business operations. Management

believes the most directly comparable GAAP measure would be “Net cash

provided by operating activities.” Due to the difficulty in forecasting

and quantifying the amounts that would be required to be included in

this comparable GAAP measure, the company is not providing an estimate

of year-end net cash provided by operating activities at this time.

Forward-Looking Statements

This press release includes certain “forward-looking statements,” as

that term is defined in the Private Securities Litigation Reform Act of

1995. These forward-looking statements are based on management’s beliefs

and projections as well as on a number of assumptions concerning future

financial results, rates of return, dividend payments, and other future

events made using information currently available to management. Readers

are cautioned not to put undue reliance on such forward-looking

statements, which are not a guarantee of performance and are subject to

a number of uncertainties and other factors, many of which are outside

ACS’ control. Such factors are, without limitation, the company’s

ability to complete, manage, integrate, market, maintain, and attract

sufficient customers to the products and services it may derive from the

construction of its AKORN fiber facility and its purchase of Crest, the

closing of which remains subject to certain conditions and

uncertainties; changes in capital expenditures, or other factors

affecting the company’s ability to generate sufficient earnings and cash

flows to continue to make payments on its substantial debt and dividend

payments to its stockholders; the continued availability of financing to

support future operations or expansion; increased competition, including

from national wireless and local wireline facilities-based competitors;

regulatory limitations on pricing or bundling of its communications

services; the company’s ability to keep pace

with rapid technological developments in the telecommunications

industry; fluctuations in wireless revenue, including roaming revenue;

changes in company’s relationships with its roaming partners; changes in

revenue from the Universal Service Fund or other public policy changes;

changes in accounting policies or practices; changes in interest rates

or other general national, regional or local economic conditions,

including changes in tourism in Alaska. For further information

regarding risks and uncertainties associated with ACS’ business, please

refer to the company’s SEC filings, including, but not limited to, the

sections entitled “Risk Factors” and “Management’s Discussion and

Analysis of Financial Condition and Results of Operations” in our annual

report on Form 10-K and quarterly reports on Form 10-Q. Copies of the

company’s SEC filings may be obtained by contacting its investor

relations department at (907) 564-7556 or by visiting its investor

relations website at www.alsk.com.

Schedule 1
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in Thousands, Except per Share Amounts)
				Three Months Ended								Six Months Ended
				June 30,								June 30,
					2008				2007				2008				2007
Operating revenues:
	Wireline			$	59,071			$	60,874			$	122,177			$	120,842
	Wireless				35,285				33,627				68,955				65,282
		Total operating revenues			94,356				94,501				191,132				186,124
Operating expenses:
	Wireline (exclusive of depreciation and amortization)				43,972				44,543				87,242				88,686
	Wireless (exclusive of depreciation and amortization)				20,802				17,940				40,923				33,815
	Depreciation and amortization				19,138				18,646				35,601				36,091
	Loss on disposal of assets, net				745				21				759				24
		Total operating expenses			84,657				81,150				164,525				158,616
Operating income					9,699				13,351				26,607				27,508
Other income and expense:
	Interest expense				(8,676	)			(7,518	)			(15,905	)			(14,965	)
	Interest income				706				506				1,009				1,035
	Other				(75	)			(72	)			(151	)			8
		Total other income and expense			(8,045	)			(7,084	)			(15,047	)			(13,922	)
Income before income tax expense					1,654				6,267				11,560				13,586
	Income tax expense				(746	)			(98	)			(4,876	)			(105	)
Net income				$	908			$	6,169			$	6,684			$	13,481
Net income per share:
	Basic			$	0.02			$	0.14			$	0.15			$	0.32
	Diluted			$	0.02			$	0.14			$	0.15			$	0.31
Weighted average shares outstanding:
	Basic				43,362				42,747				43,151				42,566
	Diluted				44,304				44,145				44,290			Alaska Communications Systems Group, Inc. Media: Director, Corporate Communications Paula Dobbyn, 907-297-3000 [email protected] or Investors: Director, Investor Relations Melissa Fouts, 907-564-7556 [email protected] Major Newsire & Press Release Distribution with Basic Starting at only $19 and Complete OTCBB / Financial Distribution only $89 Get Unlimited Organic Website Traffic to your Website  TheNFG.com now offers Organic Lead Generation & Traffic Solutions