New Ulm Telecom, Inc.

Working Together Growing Strong

2010 Annual Report

To Our ShareholdersThe hard work and dedication of our employees, along with a strong business plan for success, resulted in an improved 2010 financial year. We are encouraged by the improvement of the economy and feel we are positioned to serve our customers with new and exciting communications concepts and options as economic conditions continue to progress.

The communications landscape is continually changing. We are committed to forward thinking on our business plans by researching every possibility, option and opportunity for success. By being diligent in cost containment, providing excellent service and selecting the right path to the newest and best technology, we envision a bright future for our company and ultimately our stakeholders. We continue to install equipment that enables us to deploy advanced technologies such as IP, enhanced data, voice and video solutions.

TechTrends, the company’s technology retail store, continues steady growth in computer sales and services. Among our many new offerings, one that is rapidly growing is our newest product - Managed Services. This product makes our skilled team of employees available to local businesses, allowing us to manage their IT networks and offer them confidentiality, convenience, additional services, and typically reduced expenses.

Our strategy to expand our footprint continued with the purchase of the Glencoe, Minnesota cable system in June of 2010. This acquisition fits perfectly with our existing operations and captures synergies by leveraging our employees and infrastructure already in place. The response from the community and financial results have both been very positive.

As our owners, we welcome your ideas and input, and appreciate your support. We thank you for your investment and belief in the future of New Ulm Telecom, Inc. while we continue to focus our efforts on growing the value of our company.

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Bill Otis - CEO/President James P. Jensen - Board Chairman

Directors (Opposite Page)

Front: Mary Ellen Domeier, Paul Erick and Rosemary Dittrich

Back: Duane Lambrecht, Perry Meyer, James Jensen - Board Chairman and Dennis Miller

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Vision StatementNU-Telecom will be a regional leader in the delivery and integration of communications, information and entertainment applications through innovative and flexible organizational strategies.

Mission StatementTo provide value-enhanced communication solutions with superior service provided by customer-focused employees. Our company will balance innovation with risk to enable the growth and prosperity of customers, employees, and shareowners, while partnering in the progress of our communities.

Value StatementWe believe / believe in:

• The highest level of integrity, honesty, and ethical standards in all that we do

• A customer is of primary importance and deserves our best service, attitude and consideration

• An environment that empowers employees to achieve excellence in all activities

• Active participation to the continual quality-of-life advancements in our community

• Being good stewards in managing our resources

Barbara Bornhoft COO/Vice President

Bill Otis CEO/President

Officers

Curtis Kawlewski CFO/Treasurer

Branching Out2010 was a year of steady growth for NU-Telecom. Sprouting from an already strong foundation, equipment upgrades were completed, service areas grew, and new offerings were introduced.

Welcome GlencoeNU-Telecom became a part of the Glencoe community with the purchase of the cable television system in and around Glencoe, MN. A successful system upgrade following the acquisition provided customers with the chance to enjoy additional channels, HDTV and new bundled Internet and TV packages.

Redwood Falls ExpansionThis NU-Telecom CLEC area was increased to include the entire city of Redwood Falls. All residents and businesses now have the capability of receiving voice, digital TV and high-speed Internet from NU-Telecom.

Faster FETCHResidential customers in New Ulm and Redwood Falls can now choose speeds of up to 5 and 10 Mbps FETCH high-speed Internet. These speeds can be subscribed to ala carte or as part of money-saving bundles. The needs of business customers are also being met with new increased speed options.

IPTV ProgressExpanded areas of New Ulm, Redwood Falls, Hutchinson and Litchfield are now enjoying the benefits of IPTV-based digital TV service, including DVR and access to additional standard and high definition channels. IPTV customers can also view DotDaily, an intuitive, full screen portal which allows them to stay up to date with information including local weather and movie theater offerings plus national news, sports, entertainment and more!

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Planning Ahead for 2011As NU-Telecom celebrated 105 years in 2010, it remained focused on future growth and possibilities as well. Plans for the new year include expanding bandwidth in more communities to allow for the increasing data needs of customers. IPTV service areas will also continue to increase in existing and new communities.

NU-Telecom marketing efforts will concentrate on market segmentation to better recognize the distinctive needs of customers. Social media options will also be used to interact with customers.

Thriving Where We Are PlantedNU-Telecom’s commitment to community is deeply rooted in the belief that we are only as strong as our employees and the communities we serve. In order to continue growing strong, everyone must work together. NU-Telecom is proud to employ a staff of diverse people, each offering individual talents to deliver the best possible customer care and service. Giving back to the places and people they know is important to NU-Telecom employees. They generously volunteer their time and donate money on a personal level and through company-sponsored events.

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Corporate ProfileThe corporate headquarters is located in New Ulm, MN with six additional offices in Glencoe, MN, Hutchinson, MN, Litchfield, MN, Redwood Falls, MN, Springfield, MN and Aurelia, IA. These locations also serve the Minnesota communities of Courtland, Essig, Klossner, Searles and Sanborn.

The company’s traditional line of business is providing local telephone service and access to long-distance telephone service through its local exchange network. In addition:

• New Ulm Telecom, Inc.’s broadband platform provides high-speed DSL Internet access and digital TV service to subscribers in the Minnesota communities of New Ulm, Courtland, Essig, Hutchinson, Litchfield, Searles, Redwood Falls, Springfield, Sanborn and Aurelia, IA.

• New Ulm Telecom, Inc. operates coax cable television systems in the Minnesota communities of Cologne, Glencoe, Jeffers, Mayer and New Germany. It also offers Internet service in Glencoe.

• New Ulm Telecom, Inc. is an equal owner of Hector Communications Corporation (HCC) with Arvig Communications Systems and Blue Earth Valley Communications, Inc. HCC is primarily comprised of incumbent local exchange carrier (ILEC) subsidiaries that provide voice, digital TV, and data services in Minnesota, Wisconsin and North Dakota.

• New Ulm Telecom, Inc. owns and operates TechTrends, a technology retail store located in New Ulm, MN.

2104 E 10th Street Glencoe, MN 55336 (320) 864-2818 (800) 303-7039

235 Franklin St SW Hutchinson, MN 55350 (320) 587-2323 (800) 303-7039

421 S CSAH 34 Litchfield, MN 55355 (320) 593-2323 (800) 303-7039

137 E Second St Redwood Falls, MN 56283 (507) 627-4111 (877) 214-8665

22 S Marshall Springfield, MN 56087 (507) 723-4211 (800) 593-1856

221 Main St Aurelia, IA 51005 (712) 434-5989

Corporate Headquarters

27 N Minnesota St P.O. Box 697 New Ulm, MN 56073 (507) 354-4111 (888) 873-6853

Fax: (507) 359-1611 Website: www.nutelecom.net

Other office locations:

Legal Counsel Independent AuditorsBerens, Rodenberg & O’Connor, Chtd. Olsen Thielen & Co., Ltd. 519 Center Street 2675 Long Lake Road New Ulm, MN 56073-0428 St. Paul, MN 55113-1117

15 Berens Blvd New Ulm, MN 56073 (507) 233-3000

Retail location:

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Investor InformationAnnual MeetingThe Annual Meeting of New Ulm Telecom, Inc. will be held on Thursday, May 26, 2011, beginning at 10:00 a.m. at Turner Hall, 102 South State Street in New Ulm, MN.

Voting OptionsInternet: Go to www.proxyvote.com to transmit your voting instructions up until 10:59 p.m. Central Time on Wednesday, May 25, 2011.

Phone: Call 1-800-690-6903 from a touch-tone telephone to transmit your voting instructions up until 10:59 p.m. Central Time on Wednesday, May 25, 2011.

For Internet or phone, have your proxy card in hand to enter your 12-digit control number; then follow the simple instructions provided by Voice Vote.

Mail: Mark, sign and date your proxy card, then return it in the postage-paid envelope or return it to New Ulm Telecom, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

Form 10-KShareholders may view all SEC filings, including the company’s Form 10-K to the Securities and Exchange Commission, at www.nutelecom.net or they may receive a hard copy of the Form 10-K (without charge) by writing to Bill Otis, CEO/President, New Ulm Telecom Inc., P.O. Box 697, New Ulm, MN 56073.

Shareholder Suggestions for DirectorsThe Company’s Corporate Governance/Nominating Committee will consider shareholder suggestions for nominees for election to the Company’s Board if these suggestions are in writing and include biographical data and a description of the nominee’s qualifications. These suggestions must also be accompanied by the written consent of each nominee and can be mailed to the corporate Governance/Nominating Committee: New Ulm Telecom Inc., Attn: Corporate Secretary, 27 North Minnesota St, New Ulm, MN 56073. These suggestions must be received by the Corporate Secretary no later the December 31, 2011.

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