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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2004

OR

¨    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE
        ACT OF 1934

        For the transition period from             to             .

Commission file number 0-19551

Atlantic Tele-Network, Inc.

(Exact name of registrant as specified in its charter)

(340) 777-8000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

Title of each class

None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The aggregate market value of the shares of all classes of voting stock of the registrant held by non-affiliates of the registrant on June 30, 2004, was approximately $65,551,089 computed upon the basis of the closing sales price of the Common Stock on that date. For purposes of this computation, shares held by directors (and shares held by any entities in which they serve as officers) and officers of the registrant have been excluded. Such exclusion is not intended, nor shall it be deemed, to be an admission that such persons are affiliates of the registrant.

As of March 21, 2005, there were 5,006,133 outstanding shares of Common Stock, $.01 par value, of the registrant.

Documents Incorporated by Reference

Portions of the proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A for the registrant’s 2005 annual meeting of stockholders are incorporated by reference into Part III of this Form 10-K.

Table of Contents

ATLANTIC TELE-NETWORK, INC.

ANNUAL REPORT ON FORM 10-K

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004

Table of Contents

PART I

Item 1.    Business

Introduction

Atlantic Tele-Network, Inc. (“ATN,” “Company” or “we”) is a holding company with the following operating subsidiaries and affiliates:

The Company was established in 1987 to acquire the Virgin Islands Telephone Corporation from ITT Corporation. In November 1991, the Company became a public company. On December 30, 1997, the Company was split into two separate public companies, with ATN retaining its 80% interest in GT&T and the Company’s then existing telephone operations in the U.S. Virgin Islands being spun off to a new public company called Emerging Communications, Inc. In connection with the transaction, the number of outstanding shares of the Company’s capital stock was reduced by 60% (in effect, a reverse stock split of 1:2.5).

We are continually evaluating opportunities for establishing or acquiring other telecommunications businesses in the Caribbean, Latin America, the United States and elsewhere, and may make investments in such businesses in the future.

GT&T

General.    GT&T supplies all public telecommunications service in Guyana and is the exclusive provider of local exchange and long distance services. GT&T is also by far the largest mobile wireless service provider in

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Guyana. GT&T is the successor to the Guyana Telecommunication Corporation (“GTC”), a corporation wholly owned by the government of Guyana, which prior to 1991 had been the exclusive provider of telecommunications services in Guyana for more than 20 years.

International Traffic.    GT&T’s revenues and earnings have been highly dependent upon international long-distance calls originating outside of Guyana, including collect calls from Guyana to foreign points. The following table sets forth data with respect to the volume of GT&T’s international traffic for the past three years:

GT&T has agreements with foreign telecommunications administrations and private carriers covering all international calls into or out of Guyana. These agreements include negotiated “settlement rates” which govern the rates of payment by GT&T to the foreign carriers for the use of their facilities in connecting international calls billed in Guyana, and by the foreign carriers to GT&T for the use of its facilities in connecting international calls billed abroad.

The two classes of international traffic described in the above table have historically produced significantly different profit margins for GT&T. In the case of regular inbound traffic and outbound collect traffic, GT&T receives a “settlement rate” payment from the foreign telecommunications carrier generally equal to one-half of the applicable “accounting rate”, and GT&T has no significant direct expenses associated with such traffic except for international transmission systems costs which are applicable to all of GT&T’s international traffic. In the case of outbound international traffic, GT&T must typically pay the foreign carrier a settlement rate payment equal to one-half of the applicable international accounting rate, and GT&T collects from its subscriber a rate that is regulated by the Public Utilities Commission of Guyana (“PUC”). During the past three years, amounts collected by GT&T for outbound international traffic have in the aggregate exceeded the payments due to foreign carriers for such traffic, and the average rate GT&T pays for outbound international traffic has declined significantly as well. However, the growth of GT&T’s outbound international traffic volume has been negatively impacted by the existence of numerous internet telephony providers, such as “internet cafés,” which sell long distance internet calls to the public, in apparent contravention of the law and GT&T’s license. See “Competition.”

On January 1, 2002, the United States Federal Communications Commission (“FCC”) reduced the settlement rate for U.S.—Guyana traffic from $0.85 per minute to $0.23 per minute. This resulted in a substantially reduced profit margin on inbound traffic from the United States but has increased GT&T’s margin on outbound traffic to the United States. See “—Regulation” and “Managements’ Discussion and Analysis of Financial Condition and Results of Operations—Introduction.”

Domestic Service.    As of December 31, 2004, GT&T had approximately 103,000 fixed subscriber access lines in service. This represents approximately 15 lines per 100 inhabitants with an estimated population of approximately 700,000, an increase of approximately 11%, or over 10,500 net new lines, compared to lines in service at December 31, 2003. Of all fixed lines in service, the majority is in the largest urban areas, including Georgetown, Linden, New Amsterdam, Diamond and Beterverwagting. During 2004, GT&T continued to extend its network to cover additional rural towns and communities. However, despite GT&T’s substantial and continuing investment in extending its fixed line network, many rural areas still do not have telephone service. GT&T recently received permission from the PUC to charge special rates to bring service to additional remote communities. This service has provided much relief to hinterland areas, where it would not be economically feasible to provide widespread landline service, as these communities tend to be small and spread apart. GT&T extended access lines to 23 remote locations in 2004 at the new special rates.

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GT&T’s revenues for fixed access domestic service are derived from installation charges for new lines, monthly line rental charges, monthly measured service charges based on the number and duration of calls and other charges for maintenance and other customer services. For each category of revenues, rates differ for residential and commercial customers. As GT&T has continued its network expansion to smaller communities, residential customers account for a growing portion of local service revenues and the vast majority of new lines in service. In 2004, residential customers contributed 74% of the local service revenue and commercial customers provided 26%. As of January 2005, GT&T’s basic monthly charge per access line was approximately $2.44 for residential customers and $7.32 for business customers. GT&T also utilizes Northern Telecom fixed wireless access technology to provide services to more than 5,000 of its access line subscribers as of December 31, 2004. The normal landline rates apply to GT&T’s fixed wireless network services.

GT&T currently offers cellular telephone service in the Georgetown area (Guyana’s capital and largest city) and along substantially all of Guyana’s coastal plain. Cellular subscribers are offered various calling plans and are charged a monthly fee plus airtime based on the selected plan. In May 2001, the Guyana PUC approved a GT&T proposal to reduce cellular charges and initiate a “calling party pays” system. In such a system, a landline caller to a cellular telephone will pay the airtime charges rather than the cell phone subscriber. As a result of the new rates and in conjunction with the introduction of prepaid calling cards, cellular customers and revenues have increased dramatically over the last three years, beginning in the latter half of 2001. As of December 31, 2004, GT&T had approximately 151,000 cellular subscribers as compared to approximately 119,000 at December 31, 2003, an increase of about 27%.

In the fourth quarter of 2004, GT&T launched services on its new GSM/GPRS mobile wireless network, alongside its existing TDMA network. GSM/GPRS is a more advanced mobile wireless digital service than TDMA, allowing GT&T to offer richer handset features and certain mobile data services, while increasing GT&T’s network capacity. The launch of GSM services has also helped GT&T enter into roaming agreements with wireless carriers in a number of other countries, including some of the largest carriers in the U.S. and Caribbean, enabling GT&T’s subscribers to use their handsets in other countries and allowing some visitors to use their cell phones while in Guyana. GT&T expects to enter into roaming agreements with additional carriers in 2005.

Expansion.    Since the Company acquired its interest in GT&T in January 1991, GT&T has significantly rebuilt and further expanded its telecommunications network. The number of fixed access lines has increased from approximately 13,000 working lines in January 1991 to over 103,000 lines as of December 31, 2004, all of which are now digitally switched lines. GT&T first introduced cellular service in 1992. As noted above, GT&T has expanded this service dramatically in recent years and, as discussed above, in the fourth quarter of 2004 GT&T launched services on a GSM overlay across most of its existing TDMA wireless network.

GT&T is linked with the rest of the world principally through its ownership of a portion of the Americas II undersea fiber optic cable, which was commissioned in October 2000. GT&T owns capacity in four international fiber optic cables—the Americas I cable, which runs from Brazil to Trinidad, the United States Virgin Islands and the United States mainland, the Columbus II cable, which runs from the Caribbean region to the Azores, the Eastern Caribbean Fiber System (“ECFS”) cable from Trinidad to Tortola and the Americas II cable which runs from Brazil through the Caribbean to the United States with a branch to the Guyanas. GT&T also leases capacity on an Intelsat satellite. GT&T has two Intelsat B earth stations, which provide both international and local services, and provide a partial back-up to its fiber optic cable capacity.

GT&T has installed over 700 public telephones in locations across the country providing telecommunications for both local and international calls in areas that had not previously enjoyed service. GT&T also maintains three public “telephone centers” at which the public can pay to use an ordinary residential-type telephone to make international and domestic calls.

Other Services.    GT&T is also licensed to provide various telephone-related services that extend beyond basic telephone service, including yellow pages and other directory services. GT&T also provides broadband resale services to internet service providers.

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Significant Revenue Sources.    MCI accounted for more than 10% of GT&T’s total telephone operating revenues in 2002, 2003 and 2004, and IDT Corporation accounted for more than 10% of GT&T’s total telephone operating revenue in 2004. See Note 2 to the Consolidated Financial Statements included in this Report.

Competition.    Pursuant to its license from the Government of Guyana, GT&T has the exclusive right to provide, and is the sole provider of, local, domestic long-distance and international telephone service in Guyana. GT&T also has the exclusive franchise to provide telephone directories and directory advertising and to supply a wide variety of telecommunications equipment in Guyana. GT&T’s revenues from directory advertising and the sale of telecommunications equipment have not been significant to the Company. The exclusivity provisions of GT&T’s license are the subject of negotiations with the Government of Guyana. See “GT&T—Regulation—Other Regulatory Developments.”

GT&T has a non-exclusive license to provide cellular radio telephone service. Three other companies have been licensed to provide similar services. Of these, the most significant competitor conducts business in Guyana as CelStar. CelStar built a GSM network with comparable coverage in Guyana to GT&T and launched services in the 4^th quarter of 2004. CelStar has an estimated 6,000 subscribers as of February 2005. CelStar is owned by a non-Guyanese company, which apparently owns several other licenses in the Caribbean but no other operational systems. There has been some dispute as to which entity actually owns the CelStar license, which delayed GT&T’s connection to CelStar until late 2004. Another competitor has had a small network and subscriber base in Berbice for several years. In addition, as discussed further below, the Government has proposed a split of the licensed 900 MHz spectrum. Furthermore, recent reports indicate that the Government intends to issue one or more additional cellular licenses in the near future. The PUC presently regulates cellular service rates for GT&T and its competitors.

Although outbound traffic has increased in recent years, as mentioned above, GT&T also competes with illegal “internet cafes” in Guyana that are offering VoIP services. These calls can undercut GT&T’s normal prices as the current PUC orders require GT&T to maintain the internet service to dial-up users at no local meter charges. Further, numerous private residences and businesses have been utilizing new technologies such as the “yap jack” which allows for “free” internet calls. While GT&T has objected to the relevant authorities that these activities are a violation of GT&T’s exclusive international license, no action has been taken in this regard. GT&T offers a lower cost international service at its phone booths to counteract the effects of the internet cafés.

Regulation—General.    GT&T is subject to regulation in Guyana under the provisions of its License and under the Guyana Public Utilities Commission Act of 1999 (“PUC law”) and the Guyana Telecommunications Act 1990 (“Telecommunications Law”). Under its license from the Government of Guyana (the “License”), GT&T’s rates for most of its services must be specified in a tariff approved by the PUC. GT&T also has certain significant rights and obligations under the agreement (the “GT&T Agreement”) pursuant to which the Company acquired its interest in GT&T in 1991.

License.    The License, which was issued on December 19, 1990, granted to GT&T an exclusive franchise to provide in Guyana for a period of 20 years (renewable for an additional 20 years at the option of GT&T), public telephone, radio telephone (except private radio telephone systems which do not interconnect with GT&T’s network) and pay station telephone services and national and international voice and data transmission, sale of advertising in any directories of telephone subscribers and switched or non-switched private line service. In addition, GT&T was granted a non-exclusive license to provide, for a period of 20 years (renewable for an additional 20 years at the option of GT&T), cellular radio telephone service.

GT&T Agreement.    Under the GT&T Agreement, GT&T undertook to complete a substantial expansion plan by a date that, after giving effect to certain agreed upon extensions, was February 28, 1995, and GT&T was entitled to a specified minimum return. Subject to certain limitations applicable to the years of 1991 through 1994, GT&T is entitled, pursuant to the GT&T Agreement, to a minimum return of 15% per annum on its capital dedicated to public use (“rate base”). Absent mutual agreement by the Government of Guyana and the Company

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(and there has been no such agreement), rates are to be calculated on the basis of GT&T’s entire property, plant and equipment pursuant to a rate of return methodology consistent with the practices and procedures of the FCC. GT&T believes that its rate base at December 31, 2004 was approximately $106 million, although the PUC in various orders or staff reports has disallowed or challenged several million dollars of franchise rights and working capital that are included in the foregoing figure. Under the GT&T Agreement, upon non-renewal or termination of the License, the Government of Guyana will be entitled to purchase the Company’s interest in GT&T or the assets of GT&T upon such terms as may be agreed to by the Company and the government or, absent such agreement, as may be determined by arbitration before the International Center for the Settlement of Investment Disputes.

PUC Law and Telecommunications Law.    The PUC Law and the Telecommunications Law provide the general framework for the regulation of telecommunications services in Guyana. The Public Utilities Commission of Guyana is an independent statutory body with the principal responsibility for regulating telecommunications services in Guyana. The PUC has authority to set rates and has broad powers to monitor GT&T’s compliance with the License and to require GT&T to supply it with such technical, administrative and financial information as it may request. The PUC claims broad authority to review and amend any GT&T program for development and expansion of facilities or services. GT&T has challenged the PUC’s claim.

Although, under the current PUC Law and predecessor statutes that have been in effect since 1990, the PUC is obligated to honor the provisions of the GT&T Agreement which guarantees GT&T at least 15% per annum return on its rate base, in our opinion, the PUC has frequently failed to do so. For a description of recent actions of the PUC, see Note 11 to the Consolidated Financial Statements included in this Report.

Other Regulatory Developments.    In 2001, the Government of Guyana announced its intention to introduce additional competition into Guyana’s telecommunications sector and reports and comments since that date indicate that this remains the Government’s intention. We believe that the introduction of wireline based competition would require the termination of the exclusivity provisions of GT&T’s license, and thus would require appropriate compensation to GT&T and a rebalancing of rates so that the rates for each service represent the real economic cost of such services. We also believe that the government is considering shifting from rate of return regulation to incentive rate-cap regulation. In February 2002, GT&T began negotiations with the Government on these issues and all other outstanding issues between GT&T and the Government; however, negotiations have languished since the second quarter of 2002. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Introduction” and Note 11 to the Consolidated Financial Statements included in this Report.

On December 23, 2004, GT&T received a letter from the National Frequency Management Unit (“NFMU”) stating that they propose to divide the GSM 900 spectrum into four separate bands. This spectrum was previously divided into two bands which were awarded to GT&T and CelStar Guyana, Inc. GT&T is seeking a postponement of any NFMU reclamation of spectrum until GT&T can review the consequences of the NFMU’s proposal. GT&T is in the process of analyzing the effect that this proposed division would have on its network. The most likely outcome of this spectrum subdivision would be the further sectorizing of the network where GT&T might be required to add additional cell sites or additional equipment to existing sites in order to increase capacity.

FCC Matters.    In 1997, the FCC issued a Report and Order in a rule making proceeding in which it adopted mandatory international accounting and settlement rate benchmarks for many countries. The FCC adopted a mandatory settlement rate benchmark of $0.23 per minute for low-income countries such as Guyana and required that settlement rates between the U.S. and low-income countries be reduced to $0.23 per minute by January 1, 2002. The settlement rate in effect prior to January 1, 2002 was $0.85 per minute, and revenues from this traffic provided a significant subsidy to GT&T’s local operations and network expansion. The implementation of the FCC’s benchmark rate order in January of 2002 resulted in a substantial reduction in inbound international telecommunication revenue. See “Management Discussion and Analysis of Financial

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Condition and Results of Operations—Introduction.” In 2002 and again in 2003, AT&T proposed further reductions in the settlement rate benchmarks for many countries, including Guyana, and requested that the FCC initiate a rule-making to consider the issue. In early 2004, the FCC rejected AT&T’s request but indicated that it will continue to monitor and evaluate settlement rate benchmarks.

Choice Communications

Choice Communications is the largest provider of internet access services in the U.S. Virgin Islands. Choice provides internet access services throughout the U.S. Virgin Islands, primarily under the domain names viaccess.net and islands.vi. Internet service is provided by dial-up and by high-speed wireless links (referred to as “wireless DSL” or “wDSL”). Choice Communications also provides “wireless cable television” or “wCATV” services to residential subscribers and hotel rooms, providing up to 137 digital channels of video programming and an additional 56 digital channels of audio programming, SMR and paging services. Choice television subscribership increased by over 40% in 2004 while its internet dial-up subscribers decreased by about 17% in 2004. Choice completed infrastructure build-outs in 2004, which significantly expanded the service areas covered by Choice’s wireless network. Choice plans to introduce new technology in 2005 to support broader deployment of wDSL services. The expanded network infrastructure will help support Choice’s focus on continued growth in both wCATV and wDSL services.

Choice Communications is seeking to provide competitive telecommunications services using licensed frequencies and infrastructure it owns or will acquire and/or construct, and by leasing wireline facilities from Innovative Telephone Company (“Innovative,” formerly named the Virgin Islands Telephone Company, which until the reorganization of the Company in December 1997 was a subsidiary of the Company). During 2001, the Virgin Islands Public Services Commission (“PSC”) concluded that Innovative is exempt from certain requirements of the Telecommunications Act of 1996 due to Innovative’s status as a rural telephone company. The PSC decision does not prohibit entry into the U.S. Virgin Islands telecommunications market, but does shield Innovative from offering its network elements at wholesale rates to competitors. Choice appealed the PSC’s decision to the District Court. A decision is expected in 2005.

In 2002, Choice requested the Virgin Islands PSC to direct Innovative to sell a specific service to Choice in order for Choice to deploy high-speed data and internet services. The service, a DS-3 circuit, is available to competitors in other jurisdictions pursuant to tariff. In 2003, the PSC’s hearing examiner conducted a hearing on Choice’s request and recommended that Choice’s request to the PSC be denied. In 2004, the PSC adopted the hearing examiner’s recommendation and denied Choice’s request. The PSC also initiated a proceeding to consider whether demand for DS-3 service in the Virgin Islands nevertheless is sufficient to require Innovative to offer the service. That proceeding is on-going at the PSC.

In 2002, Choice Communications also petitioned the Virgin Islands Public Services Commission for classification as an “Eligible Telecommunications Carrier” (“ETC”), which, if granted, would permit Choice to apply for funds from the Federal Universal Service program created to facilitate the deployment of telecommunications services in rural and high-cost areas. In 2003, the Public Services Commission held hearings on Choice’s request and, in February 2004 concluded that it did not have jurisdiction over Choice on this issue, and directed the petition to the FCC. In January 2005, Choice filed a Petition for Designation as an Eligible Telecommunications Carrier at the FCC. The public comment cycle closed in March and the proceeding is pending. If Choice is designated an ETC, it may require a significant capital investment in order to build out the capabilities necessary to sustain the ETC designation and meet the requirements for Federal Universal Service support. See Note 11 to the Consolidated Financial Statements included in this Report.

In July 2004, the FCC released an Order revising the rules and spectrum band plan applicable to the MMDS and ITFS services and renaming the services Broadband Radio Service (“BRS”) and Educational Broadband Service (“EBS”) respectively. These are the spectrum bands in which Choice operates its video and broadband data services. The new rules, to which Choice and many industry parties have objected, are subject to

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clarification and reconsideration before they become effective, and may have a material adverse effect on Choice operations if they remain unaltered and are applied to Choice. ATN and Choice are working within the applicable FCC rules to minimize the potential negative impact on Choice.

BDC

BDC provides cellular telephone service in Bermuda under the name “Cellular One.” BDC faces competition from the incumbent telephone company’s cellular subsidiary, Mobility, and, since 2001, AT&T Wireless (now Cingular). BDC commenced operations in July 1999. At December 31, 2004 BDC had approximately 20,000 subscribers, which it estimates to be about 50% of the cellular market in Bermuda. In 2003, BDC added a CDMA 1XRTT overlay to its TDMA network. CDMA 1XRTT, an advanced version of the CDMA standard, has allowed BDC to offer a number of new services and enhancements to its customers, including fast mobile data services and improved handset functionality. In 2004, BDC further upgraded its capability for data services by successfully installing “EV-DO” (Evolution Data Optimized, a CDMA 1XRTT enhancement), which essentially enables BDC to offer broadband data services over the cellular network, primarily a mobile high-speed internet connection. BDC launched these services in the first quarter of 2005. In the end of 2003 and in 2004, BDC entered into roaming agreements with two of the largest U.S. cellular providers. This led to increased roaming revenue in 2004 from visitors to Bermuda and from BDC’s own subscribers traveling abroad.

ATC

ATC, a wholly owned subsidiary of the Company, established a web-enabled call center in Guyana in late 2000 to provide telemarketing and customer support services, via voice and data. Guyana has an English speaking population with a high literacy rate, and a low average minimum hourly wage rate. ATC trained its agents to work from client-supplied data readily accessible to them on ATC’s computer network. ATC’s call center facilities are located in Beterverwagting, Guyana, and the facilities are sufficient for 100 agents to work simultaneously with the capability to expand to 500 agents. ATC’s call center facilities are connected to its client’s customers in the U.S. and elsewhere via GT&T’s circuits in the Americas II fiber optic under-sea cable and through Intelsat satellites. We established a point of presence in Miami, Florida to facilitate this communication. ATC had not been operating anywhere near its capacity, and reduced the size of its workforce substantially in 2003 because of a lack of customer contracts and revenues. Although results improved with the establishment of a wholesale arrangement in the third quarter of 2004, the subsequent default in the fourth quarter of 2004 by this customer led us to record an impairment charge of $1.2 million related to these assets. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments.” We curtailed ATC’s call center operations in early 2005, and we are examining a variety of strategic solutions including a possible sale, long-term lease or closure of the business. As of December 31, 2004, ATN had invested approximately $8.4 million in ATC and enjoys a tax holiday through 2010. In early 2004, ATC acquired the assets of a small, early-stage VSAT satellite business, which provides broadband internet access in the Caribbean from ATC’s hub in Miami, Florida under the name Atlantic Tele-Satellite.

Call Home Telecom, LLC

Call Home Telecom was established in 2002 primarily to service the outbound collect call market from Guyana. Due to previously reported collection problems, we curtailed these operations in late 2004. We have invested over $1 million in this business through December 31, 2004 and the telephone plant was valued at approximately $147,000 on our balance sheet, net of accumulated depreciation, at that date. We are currently re-orienting our equipment, personnel and international connections towards providing international wholesale transport of telecommunications traffic. CHT maintains a point of presence in Miami, FL at a telecommunications co-location facility due to its proximity to the undersea fiber systems, which connect North America to the Caribbean Islands and Guyana. CHT expects to maintain its status as a licensed international carrier with FCC Section 214 authority.

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ATN-Haiti and Transnet

At December 31, 2001, we wrote-off our investment in ATN-Haiti and curtailed the operations and funding of both ATN (Haiti) and Transnet. These businesses continue to provide services to customers in Haiti, but without providing or using cash from us. The impact of the activities of ATN (Haiti) and Transnet on our 2002, 2003 and 2004 results of operations were insignificant. We continue to explore strategic alternatives for the use or disposition of the remaining assets and are in active discussions concerning such alternatives.

Taxation—United States

As a U.S. corporation, ATN is subject to U.S. federal income taxation on its worldwide net income, currently at rates up to 35%. GT&T is a controlled foreign corporation (“CFC”) for purposes of the Subpart F provisions of the Internal Revenue Code of 1986, as amended (the “Code”). Under those provisions, the Company may be required to include into income certain earnings and profits (“E&P”) of a CFC at the time such E&P are earned by the subsidiary, or at certain other times prior to their being distributed to the Company. In general, to the extent E&P are distributed in a later year, the previously taxed amounts are not subject to U.S. taxation upon the distribution. For the current year, ATN has included into U.S. income a portion of the unremitted E&P of GT&T. Pursuant to the foreign tax credit provisions of the Code, and subject to complex limitations contained under those provisions, the Company is entitled to credit foreign withholding taxes on dividends or interest received, and foreign corporate income taxes of its subsidiaries paid with respect to income distributed as dividends or income inclusions under Subpart F from such subsidiaries, against the Company’s U.S. federal income tax.

On October 22, 2004, the American Jobs Creation Act (“AJCA”) was signed into law. The AJCA addressed multiple areas of U.S. taxation. For ATN, the most relevant sections included an increased carryforward period of foreign tax credits, an increased ability to offset Alternative Minimum Tax (“AMT”) with foreign tax credits and the ability to repatriate certain foreign earnings at a reduced rate of U.S. taxation.

As of October 22, 2004, the Company had foreign tax credit carry forwards of approximately $3.4 million with expiration dates between 2006 and 2008. For foreign tax credits that were present as of October 22, 2004, the AJCA extends the carryforward period of foreign tax credits by an additional five years to 2011 and 2013 for the Company. As of the end of 2004, the Company has a total foreign tax credit carryforward of approximately $5.7 million.

As of the end of 2004, the Company has Alternative Minimum Tax Credits carry forwards of approximately $1.3 million

The AJCA includes a deduction of 85% of certain foreign earnings that are repatriated, as defined in the AJCA. ATN may elect to apply this provision to qualifying earnings repatriations during their 2005 tax year. ATN has started an evaluation of the effects of the repatriation provision; however, it does not expect to be able to complete this evaluation until after Congress or the Treasury Department provide additional clarifying language on key elements of the provision. ATN expects to complete its evaluation of the effects of the repatriation provision within a reasonable period of time following the publication of the additional clarifying language. The range of possible amounts that ATN is considering for repatriation under this provision is between zero and $165 million. Due to complexity of the provisions of AJCA and pending additional clarifying language, the related range of income tax effects of such repatriation cannot be reasonably estimated at this time.

For tax years ending after December 31, 2004, taxpayers will be permitted to offset 100 percent of AMT liability with AMT foreign tax credits, subject to certain complex limitations. Prior to the AJCA, taxpayers were only permitted to offset 90 percent of AMT liability with AMT foreign tax credits. This change may provide us with a modest tax benefit in 2005.

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A U.S. corporation is classified as a Personal Holding Company (“PHC”) if (a) more than 50% of its capital stock is owned directly or indirectly by or for five or fewer individuals (or pension plans); and (b) at least 60% of its adjusted ordinary gross income consists of certain types of income (principally passive income, including interest and dividends) included in the Code definition of “PHC Income.” For any taxable year that a corporation is a PHC, the “undistributed personal holding company income” of such corporation for that year (i.e., the net income of the corporation as reflected on its U.S. corporate income tax return, with certain adjustments, minus, in general, federal income tax and dividends distributed or deemed distributed for this purpose) would be subject to an additional PHC tax of 15%. The Company currently satisfies the above ownership criterion but the Company believes that it does not satisfy the income criterion for classification as a PHC.

Taxation—Guyana

GT&T’s worldwide income is subject to Guyanese tax at an overall rate of 45%. The GT&T Agreement provides that the repatriation of dividends to the Company and the payment of interest on GT&T debt denominated in foreign currency are not subject to withholding taxes. It also provides that fees payable by GT&T to the Company or any of its subsidiaries for management services they are engaged to render shall be payable in foreign currency and that their repatriation to the United States shall not be subject to currency restrictions or withholding or other Guyana taxes. GT&T has a number of tax issues pending before the Guyana revenue authorities or the Guyana courts. See Note 11 to the Consolidated Financial Statements included in this Report.

Employees

As of December 31, 2004, GT&T employed approximately 617 persons of whom approximately 430 are represented by the Guyana Postal and Telecommunications Workers Union. GT&T and this union completed negotiations in the fourth quarter of 2004 on the salaries and wages section of a new contract. The two parties signed an agreement awarding workers (which will apply to non-unionized staff as well) a 7% increase for the period from October 2004 to September 2005 and a 6% increase for the period from October 2005 to September 2006. GT&T expects to commence negotiations on benefit increases some time in 2005. GT&T’s new contract with the union expires in September, 2006.

The Company and its other subsidiaries employed a total of approximately 83 persons at December 31, 2004. The Company considers its employee relations to be satisfactory.

Item 2.    Properties

At December 31, 2004, GT&T utilized approximately 266,000 square feet of building space on approximately 48 acres of land in various locations throughout Guyana, all of which is owned by GT&T. In addition, GT&T leases approximately 4,000 square feet of office space in Georgetown, Guyana. For additional information, see “Business—GT&T—Expansion.” GT&T carries insurance against damage to equipment and buildings, but not to outside plant. The Company and its other subsidiaries lease approximately 30,000 square feet of building space in various locations, including the U.S. Virgin Islands, Massachusetts, and Guyana.

Item 3.    Legal Proceedings

GT&T is involved in various regulatory and court proceedings in Guyana that are discussed in Item 1 “GT&T—Regulation” and Note 11 to the Consolidated Financial Statements included in this Report.

We are involved in various other litigation, the ultimate disposition of which, in the opinion of management, will not have a material adverse effect on the financial position or results of operations of the Company.

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Item 4.    Submission of Matters to a Vote of Security Holders

There were no matters submitted to a vote of security holders during the fourth quarter of 2004.

Executive Officers of the Registrant

Set forth below are the executive officers of the Company as of the date hereof:

Cornelius B. Prior, Jr. has been Chief Executive Officer and Chairman of the Board of ATN since December 30, 1997. From June 30, 1987 to December 1997 he was Co-Chief Executive Officer and President of the Company. He was Chairman of the Board of Virgin Islands Telephone Corporation from June 1987 to March 1997, and became chairman of the Board of GT&T in April 1997. Upon graduation from the Harvard School of Law in 1962, he spent one year as a Fullbright Scholar in Brazil and then joined the law firm of Sullivan and Cromwell in 1963. From 1980 until June 1987, Mr. Prior was a managing director and stockholder of Kidder, Peabody & Co. Incorporated, where he directed the Telecommunications Finance Group. He is the father of Michael T. Prior, the Chief Financial Officer and Treasurer of the Company. Mr. Prior is currently the Chairman of the Caribbean Association of National Telecommunications Organizations (“CANTO”).

Steven J. Parrish joined the Company in 2003 as Vice President of Operations. Mr. Parrish served as Senior Vice President, Network, for LighTrade, Inc., from May 2000 to February 2002 (LighTrade filed for Chapter 7 bankruptcy protection during the first quarter of 2002). He has over 25 years of telecommunications experience. As a vice president at Ameritech, he led the successful Advanced Intelligent Network (AIN) effort from concept to implementation. Mr. Parrish led engineering and operations efforts as the EVP of Operations at USN Communications, a local telecommunications service reseller, and was Senior Vice President of Global Operations and Engineering at WorldPort Communications, with responsibilities over operations based in the U.S., Great Britain, and the Netherlands. He has B.S. in Electronics Engineering from the University of Illinois and an MBA specializing in Telecommunications from IIT.

Michael T. Prior joined the Company in 2003 as Chief Financial Officer and Treasurer. Mr. Prior came to ATN from Q Advisors LLC, a Denver-based investment banking and financial advisory firm focused on the telecommunications sector. Before that, he headed corporate development for LighTrade, Inc., a telecommunications infrastructure provider (LighTrade filed for Chapter 7 bankruptcy protection during the first quarter of 2002) and was a member of ComSpace Development LLC, a seed investment concern in the communications industry. Mr. Prior was a corporate lawyer with Perkins Coie LLP in Seattle and also spent a number of years in the London and New York offices of Cleary Gottlieb Steen & Hamilton. Mr. Prior received a J.D. summa cum laude from Brooklyn Law School and received a B.A. from Vassar College. He is the son of Cornelius B. Prior, Jr., the Chief Executive Officer and Chairman of the Board of the Company.

Lawrence M. Fuccella became a Vice President of ATN in 1998. Mr. Fuccella joined GT&T as assistant finance controller in July 1992 after receiving his MBA from Virginia Commonwealth University. He became finance controller of GT&T in 1993. Since 1994 he has been Special Projects Director and Vice President—Carrier Relations, with responsibility for managing the Company’s limited wholesale long distance operations and relationships and its relationships with carriers and foreign telecommunications administrations. Mr. Fuccella also manages the operations of CHT.

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Douglas J. Minster joined the Company in 2003 as Vice President and General Counsel. From November 1999 to February 2002 Mr. Minster was VP, External Affairs, at LighTrade, Inc. (LighTrade filed for Chapter 7 bankruptcy protection during the first quarter of 2002), prior to which he headed corporate development at IP Radio, Inc., a wireless broadband service. He was part of the founding team and senior legal advisor at Time Warner Telecommunications, and founded a satellite radio company, developing the regulatory foundation for the satellite radio service. Mr. Minster began his career as an attorney at the FCC, later joining the former Chairman of the FCC at Patrick Communications as an advisor on domestic and international regulatory and legal issues. He has a B.S. from Ithaca College and a J.D. from The Catholic University Columbus School of Law.

Christopher N. Burns, CPA joined the Company in 2003 as Chief Accounting Officer. From September 2002 to October 2003 Mr. Burns was the Corporate Controller for Nauticus Networks, Inc., a privately held high-speed secure switching company. From January 1998 to August 2002 Mr. Burns was the Corporate Controller at MCK Communications, Inc., a remote access telephony company which grew from $5 million to $40 million during his tenure highlighted by a successful initial public offering and follow on offering. Mr. Burns began his career with Coopers & Lybrand in Boston, Massachusetts. He has a B.S. in Accountancy and an MBA from Bentley College.

Sonita Jagan has been Chief Executive Officer of GT&T since 1999. Ms. Jagan joined GT&T in March 1993 as Assistant Financial Controller. She was promoted to Financial Controller in 1994 and was further promoted to General Manager—Internal Affairs in June 1999. Ms. Jagan received a Bachelor of Arts in Administration and Commerce from the University of Western Ontario, Canada. As previously announced by the Company (see the Company’s Current Report on Form 8-K filed with the Commission on March 14, 2005), Ms. Jagan is resigning from GT&T effective June 1, 2005 because her husband moved to Eastern Europe in connection with his employment.

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PART II

Item 5.    Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Repurchases of Equity Securities

The Company’s Common Stock, $.01 par value, is listed on the American Stock Exchange (“AMEX”) under the symbol “ANK”. The following table sets forth quarterly market price ranges for the Company’s Common Stock in 2003 and 2004:

The approximate number of holders of record of Common Stock as of March 21, 2005 was 62.

Dividends

The following table sets forth the quarterly dividends per share declared by the Company over the past three fiscal years ended December 31, 2004:

The declaration and payment of dividends on the Common Stock is at the discretion of the Board of Directors of the Company. We have paid quarterly dividends on our common stock since January 1999, and have increased the amount of our dividend in each of the years since then. The present Board of Directors believe in returning a significant portion of profits, where possible, to stockholders and, subject to prudent resource management and strategic development needs, would expect to continue to increase the amount of our dividend if earnings continue to increase, although not necessarily proportionally. In 2002, 2003 and 2004, we paid a total annual dividend of $0.825, $0.925 and $1.025 per share, respectively. The continuation or modification of our current dividend policy will be dependent upon future results of operations, financial condition, capital requirements, contractual restrictions, regulatory actions, and other factors deemed relevant at that time by the Board of Directors.

Issuer Purchases of Equity Securities in the Fourth Quarter of 2004

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Item 6.    Selected Financial Data

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

The following selected historical financial data have been derived from and are qualified by reference to, the audited consolidated financial statements of the Company. The selected historical consolidated financial data should be read in conjunction with the audited consolidated financial statements and related notes thereto of the Company for the years ended December 31, 2002, 2003 and 2004. All dollar amounts are in thousands, except per share data.