CTE Investor Relations
100 CTE Drive
Dallas, PA 18612-9774

INVESTOR NEWS

Contact: David G. Weselcouch
Senior Vice President – Investor Relations
and Corporate Communications
(570) 631-2807

CTE Reports 2004 Third Quarter Results

CTE Reports Third Quarter Diluted Earnings Per Share of $0.71,
Reflecting a 15% Increase Versus Year Ago Quarter

Net New DSL Subscribers Increase 40% Versus End of Year Ago Quarter

Michael J. Mahoney, CTE president and CEO, will host a conference call and simultaneous webcast at 10:30 a.m. (EDT) this morning. Mr. Mahoney will review CTE’s 2004 third quarter results, and update 2004 guidance. The call is expected to last approximately 30 minutes. To access today’s conference call, please call 1-877-277-1088. The conference call passcode is 1337035. The simultaneous webcast can be accessed via the Internet at www.ct-enterprises.com. The conference call will be archived and available for replay for 48 hours following the call. To access the replay, please call 1-800-642-1687, passcode 1337035. The webcast will also be available for replay for 48 hours at www.ct-enterprises.com.

Dallas, PA – October 28, 2004 – Commonwealth Telephone Enterprises, Inc. (“CTE”) [NASDAQ: CTCO], today announced financial results for the 2004 third quarter.

CTE Consolidated Results
For the 2004 third quarter, CTE reported diluted earnings per share (“EPS”) of $0.71, versus reported diluted EPS of $0.62 in the 2003 third quarter. CTE’s 2003 third quarter reported diluted EPS included a $1.0 million (pre-tax), or $0.03 per share (after-tax), favorable effect resulting from the sale of impaired receivables in connection with WorldCom’s 2002 second quarter bankruptcy filing.

CTE ended the 2004 third quarter with a total of 475,296 switched access lines installed, reflecting a reduction of 1,141 switched access lines installed over the past 12 months ended on September 30, 2004, or a decline of 0.2%.

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CTE’s consolidated revenues in the 2004 third quarter were $83.8 million, down just over 1% versus the 2003 third quarter. The 2003 third quarter revenues, which were $85.0 million, included approximately $1.9 million of access revenues that are not reflected in the 2004 third quarter due to the percent local usage (“PLU”) issue relating to Verizon Communications Inc., that was initially discussed in CTE’s 2003 third quarter Form 10-Q, as well as $1.0 million of revenues in connection with the aforementioned WorldCom receivables.

CTE’s consolidated operating income in the 2004 third quarter was $25.7 million, versus $26.6 million in last year’s third quarter. The 2003 third quarter reflected roughly $1.9 million of operating income that is not reflected in the 2004 third quarter due to the PLU issue mentioned above. Also, the 2003 third quarter included $1.0 million of operating income in connection with the WorldCom receivables.

For the 2004 third quarter, CTE reported net income of $15.1 million, versus reported net income of $14.7 million in the 2003 third quarter.

Consolidated capital expenditures (“CAPEX”) were $11.5 million in the 2004 third quarter, versus CAPEX of $12.3 million in the year ago quarter.

The table below sets forth highlights of CTE’s 2004 third quarter reported consolidated results, versus the 2003 third quarter reported consolidated results:

		2004		2003	% Change
	Third Quarter		Third Quarter		Inc./(Dec.)
Total Access Lines		475,296		476,437	-
Revenues		$83.8M		$85.0M	( 1%)
Operating Income		$25.7M		$26.6M	( 3%)
Depreciation and Amortization		$17.7M		$17.9M	( 1%)
CAPEX		$11.5M		$12.3M	( 7%)
Reported EPS		$0.71		$0.62	15%

“I am pleased with our overall operating and financial results for the 2004 third quarter,” said Michael J. Mahoney, CTE’s president and chief executive officer. “Our two primary operations, Commonwealth Telephone Company and CTSI, both outperformed expectations in the quarter. I am particularly pleased with the performance of our DSL product. We added a record 1,703 net new subscribers in the quarter, and 4,894 over the past 12 months, reflecting 40% growth of our overall DSL subscriber base versus the end of last year’s third quarter.”

Common Stock Repurchase Program Update
In the 2004 third quarter, CTE completed just over $0.7 million of common stock repurchases. Since the stock repurchase program began last November, CTE has repurchased 3,047,244 common shares in open market and block transactions at an average all-in cost of approximately $38.90 per share, or just under $119 million.

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Repurchased shares have been placed in Treasury and may be used for the Company’s employee benefit plans. No time limit has been set for the completion of the remaining $31 million of authorized common stock repurchases. The remaining authorized repurchases will be executed at CTE’s discretion, based on ongoing assessments of the Company’s capital needs and the market value of CTE’s common stock.

Commonwealth Telephone Company (“CT”) Results

CT had a total of 334,766 switched access lines installed at the end of the 2004 third quarter – down just over 1% from the 338,514 switched access lines installed at the end of last year’s third quarter. CT’s residential additional line penetration was 37% at the end of the 2004 third quarter, versus 39% at the end of the corresponding quarter last year. A portion of the quarter-over-prior-year-same-quarter decline in additional line penetration is attributed to the solid DSL growth achieved at CT over the past year. CT’s installed base of business lines increased by just over 1% in the 2004 third quarter, versus the 2003 third quarter.

CT’s 2004 third quarter revenues were $57.0 million, down 1% versus revenues of $57.6 million in the 2003 third quarter. CT’s 2003 third quarter revenues included the favorable $1.0 million effect of the previously mentioned WorldCom receivables.

CT’s 2004 third quarter operating income was $24.8 million, versus operating income of $25.7 million in the year ago quarter. CT’s 2003 third quarter included $1.0 million of operating income in connection with the WorldCom receivables.

CT’s 2004 third quarter CAPEX were $6.7 million, versus $8.2 million in the 2003 third quarter. The decreased CAPEX in the third quarter versus last year resulted primarily from timing differences.

CTSI, LLC (“CTSI”) Results
CTSI had a total of 140,530 switched access lines installed at the end of the 2004 third quarter – a growth rate of 2% versus the 137,923 access lines installed at the end of the 2003 third quarter. Sequentially, versus the 2004 second quarter, CTSI’s net access lines installed increased by 1,214, or 1%. At the end of the 2004 third quarter, 98% of CTSI’s access lines were “on-switch,” and 54% were “on-net” (defined as 100% on CTSI’s owned network). CTSI’s business/residential line split at the end of the 2004 third quarter was 91%/9%.

CTSI’s 2004 third quarter revenues were $20.7 million, versus revenues of $21.7 million in the 2003 third quarter. CTSI’s 2003 third quarter revenues included approximately $1.9 million of access revenues, which are not included in the 2004 third quarter revenues due to the PLU issue.

CTSI’s operating income in the 2004 third quarter was $1.6 million, versus operating income of $2.0 million in the 2003 third quarter. The quarter-over-prior-year-same-quarter comparison reflects the effect of the PLU issue.

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CTSI’s 2004 third quarter capital expenditures were $4.2 million, versus $4.0 million in the year ago quarter.

Jack Flash® DSL
In the 2004 third quarter, CTE’s DSL (digital subscriber line) product, Jack Flash®, gained 1,703 net new DSL subscribers. Jack Flash® had a total of 17,029 installed DSL subscribers at the end of the 2004 third quarter, a growth rate of 40% versus last year’s third quarter. Jack Flash® is marketed in CTE’s CT and CTSI geographies. Jack Flash® utilizes DSL technology to provide broadband connectivity over standard telephone lines at speeds over 50 times faster than today’s dial-up modems.

2004 Guidance Outlined
The table below sets forth CTE’s consolidated 2004 full year guidance, which Mr. Mahoney will discuss on this morning’s conference call and webcast:

	Item	Previously Communicated 2004 Full Year Guidance	Updated 2004 Full Year Guidance*
Consolidated CTE	Access Line Growth	0%- 1%	Unchanged
	Revenue Growth	(1%) - 0%	Unchanged
	Operating Income	$98M - $99M	$101M - $102M
	Depreciation and Amortization	$71M - $72M	Unchanged
	Effective Tax Rate	37% - 38%	Unchanged
	Diluted EPS – 4Q04	n/a	$0.68 - $0.70
	Diluted EPS – FY04	$2.68 - $2.70	$2.80 - $2.82
	CAPEX	$43M - $45M	Unchanged

* Does not reflect the remaining authorized $31 million of stock repurchases.

“I am again pleased to be in a position to raise our earnings guidance for the full year,” said Mahoney. “Our solid third quarter financial performance has led us to increase our 2004 reported diluted EPS guidance to a range of $2.80 to $2.82 per share, from our prior reported diluted EPS guidance of $2.68 to $2.70.”

About CTE
Headquartered in Dallas, PA, Commonwealth Telephone Enterprises, Inc., serves a growing base of business and residential customers with the full array of technologically advanced data and voice telecommunications products and services, including broadband data services and high-speed Internet access, delivered over its 100% digitally switched, fiber-rich network.

CTE’s primary operating segments are: Commonwealth Telephone Company (“CT”), the nation’s seventh largest publicly held independent local exchange carrier, which has been operating in various rural Pennsylvania markets since 1897; and, CTSI, LLC (“CTSI”), a local exchange carrier operating in competitive markets outside CT’s territory, that formally commenced operations in 1997. Jack Flash®, a broadband data service that uses DSL technology to offer high-speed Internet access and digital connectivity solutions, is offered

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throughout CTE’s service territories. CTE’s support businesses include epix® Internet Services (www.epix.net), one of the Northeast’s largest rural Internet Service Providers (“ISPs”), and Commonwealth Communications, a provider of telecommunications equipment and facilities management services.

A web site featuring current information regarding Commonwealth Telephone Enterprises, Inc., can be found on the Internet at www.ct-enterprises.com. However, the information on this web site does not form a part of this release.

Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward- looking statements. Certain information included in this press release is forward-looking. Such forward-looking information involves important risks and uncertainties that could significantly affect expected results in the future and cause them to be different from those expressed in any forward-looking statements made by, or on behalf of, the Company. These risks and uncertainties include, but are not limited to, uncertainties related to the Company’s ability to further penetrate its markets and the related costs of that effort, economic conditions, acquisitions and divestitures, government and regulatory policies, the pricing and availability of equipment, materials and inventories, technological developments, reductions in rates or traffic that is subject to access charges, changes in the competitive environment in which the Company operates and receipt of necessary approvals.

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6TH ADD/COMMONWEALTH TELEPHONE ENTERPRISES, INC./OCTOBER 28, 2004

COMMONWEALTH TELEPHONE ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(Dollars in Thousands)
(GAAP)

	THREE MONTHS ENDED SEPTEMBER 30, 2004										THREE MONTHS ENDED SEPTEMBER 30, 2003
		CT		CTSI		OTHER			TOTAL			CT		CTSI		OTHER			TOTAL
Sales	$	56,977	$	20,673	$	6,126		$	83,776		$	57,565	$	21,702	$	5,694		$	84,961
Costs & Expenses (excluding other    operating expenses)		20,042		14,060		6,300			40,402			20,058		14,444		6,016			40,518
Depreciation & Amortization		12,117		5,009		580			17,706			11,786		5,225		869			17,880
Restructuring Reversals		--		--		--			--			--		--		--			--
Operating Income (Loss)		24,818		1,604		(754	)		25,668			25,721		2,033		(1,191	)		26,563
Interest and Dividend Income									1,755										1,006
Interest Expense									(3,585	)									(4,429	)
Other Income (Expense), net									(32	)									45
Equity in Income of Unconsolidated    Entities									240										201
Income before Income Taxes and     Cumulative Effect of Accounting     Change									24,046										23,386
Provision for Income Taxes									8,927										8,723
Income before Cumulative    Effect of Accounting Change									15,119										14,663
Cumulative Effect of Accounting     Change, Net of Tax									-										-
Net Income								$	15,119									$	14,663
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7TH ADD/COMMONWEALTH TELEPHONE ENTERPRISES, INC./OCTOBER 28, 2004

COMMONWEALTH TELEPHONE ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(Dollars in Thousands)
(GAAP)

	NINE MONTHS ENDED SEPTEMBER 30, 2004											NINE MONTHS ENDED SEPTEMBER 30, 2003
		CT		CTSI			OTHER			TOTAL			CT	CTSI		OTHER			TOTAL
Sales	$	171,418	$	62,005		$	18,747		$	252,170		$	166,492	$64,671	$	19,957		$	251,120
Costs & Expenses (excluding other
operating expenses)		59,094		41,667			20,081			120,842			58,907	41,555		20,208			120,670
Depreciation & Amortization		35,787		15,310			2,241			53,338			34,997	15,394		2,625			53,016
Restructuring Reversals		--		(799	)		--			(799	)		--	--		--			--
Operating Income (Loss)		76,537		5,827			(3,575	)		78,789			72,588	7,722		(2,876	)		77,434
Interest and Dividend Income										4,047									2,186
Interest Expense										(12,397	)								(9,025	)
Other Income (Expense), net										487									(1,113	)
Equity in Income of Unconsolidated    Entities										2,265									1,855
Income before Income Taxes and    Cumulative Effect of Accounting    Change										73,191									71,337
Provision for Income Taxes										27,189									26,506
Income before Cumulative    Effect of Accounting Change										46,002									44,831
Cumulative Effect of Accounting    Change, Net of Tax										-									13,230
Net Income									$	46,002								$	58,061

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8TH ADD/COMMONWEALTH TELEPHONE ENTERPRISES, INC./OCTOBER 28, 2004

COMMONWEALTH TELEPHONE ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(GAAP)

	THREE MONTHS ENDED SEPTEMBER 30,					NINE MONTHS ENDED SEPTEMBER 30,
		2004		2003		2004		2003
Basic Earnings per
Average Common Share:
Income before Cumulative Effect of Accounting Change	$	0.72	$	0.62	$	2.15	$	1.91
Cumulative Effect of Accounting Change, Net of Tax	$	0.00	$	0.00	$	0.00	$	0.56
Net Income	$	0.72	$	0.62	$	2.15	$	2.47
Weighted Average Common Shares Outstanding		20,957,919		23,608,855		21,434,209		23,520,895
Diluted Earnings per
Average Common Share:
Income before Cumulative Effect of Accounting Change	$	0.71	$	0.62	$	2.13	$	1.89
Cumulative Effect of Accounting Change, Net of Tax	$	0.00	$	0.00	$	0.00	$	0.56
Net Income	$	0.71	$	0.62	$	2.13	$	2.45
Weighted Average Common Shares and
Common Stock Equivalents Outstanding		21,164,781		23,783,146		21,613,082		23,704,746

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9TH ADD/COMMONWEALTH TELEPHONE ENTERPRISES, INC./OCTOBER 28, 2004

COMMONWEALTH TELEPHONE ENTERPRISES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Dollars in Thousands)

	SEPTEMBER 30, 2004		DECEMBER 31, 2003
ASSETS
CURRENT ASSETS:
Cash and Temporary Cash Investments	$	269,989	$	336,035
Accounts Receivable and Unbilled Revenues, Net of Allowance
for Doubtful Accounts of $2,473 in 2004 and $2,329 in 2003		48,953		50,240
Other Current Assets		12,698		9,387
Deferred Income Taxes		17,823		17,016
Total Current Assets		349,463		412,678
PROPERTY PLANT AND EQUIPMENT (NET OF ACCUMULATED
DEPRECIATION OF $495,288 IN 2004 AND $452,989 IN 2003)		388,585		410,485
INVESTMENTS		11,211		10,204
DEFERRED CHARGES AND OTHER ASSETS		16,995		18,286
TOTAL ASSETS	$	766,254	$	851,653

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10TH ADD/COMMONWEALTH TELEPHONE ENTERPRISES, INC./OCTOBER 28, 2004

COMMONWEALTH TELEPHONE ENTERPRISES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Dollars in Thousands)

		SEPTEMBER 30, 2004			DECEMBER 31, 2003
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes Payable	$	35,000		$	65,000
Capital Lease Obligation		721			777
Current Maturities of Long Term Debt		--			5,623
Accounts Payable		25,905			29,135
Advance Billings and Customer Deposits		5,497			5,212
Accrued Expenses		52,019			54,331
Accrued Restructuring Expenses		324			812
Total Current Liabilities		119,466			160,890
LONG TERM DEBT		300,000			323,898
CAPITAL LEASE OBLIGATION		541			1,082
DEFERRED INCOME TAXES		85,037			79,876
OTHER LONG TERM LIABILITIES		18,889			23,178
COMMON SHAREHOLDERS' EQUITY:
Common Stock		24,012			24,014
Additional Paid-in Capital		277,887			267,076
Deferred Compensation		(11,108	)		(6,451	)
Other Comprehensive Loss		(1,135	)		(2,490	)
Retained Earnings		70,902			24,900
Treasury Stock at Cost, 3,044,036 shares at September 30, 2004
and 1,207,016 at December 31, 2003		(118,237	)		(44,320	)
Total Common Shareholders' Equity		242,321			262,729
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	766,254		$	851,653

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11TH ADD/COMMONWEALTH TELEPHONE ENTERPRISES, INC./OCTOBER 28, 2004

COMMONWEALTH TELEPHONE ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Dollars in Thousands)
(GAAP)

	NINE MONTHS ENDED SEPTEMBER 30,
		2004			2003
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	95,799		$	88,500
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to Property, Plant & Equipment		(31,390	)		(29,598	)
Other		1,238			3,730
Net Cash Used in Investing Activities		(30,152	)		(25,868	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of Long-Term Debt		--			300,000
Redemption of Long-Term Debt		(29,521	)		(55,382	)
Redemption of Short-Term Debt		(30,000	)		--
Proceeds from Exercise of Stock Options		3,066			3,373
Capital Lease Payments		(597	)		(218	)
Payment Made for Debt Issuance Costs		(77	)		--
Stock Repurchases		(74,564	)		--
Net Cash Used in Financing Activities		(131,693	)		247,773
Net (Decrease)/Increase in Cash and Temporary Cash Investments		(66,046	)		310,405
Cash and Temporary Cash Investments at Beginning of Period		336,035			34,935
Cash and Temporary Cash Investments at End of Period	$	269,989		$	345,340

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