MTS Allstream to Work With Microsoft and Alcatel-Lucent to Introduce Enhanced Broadband Internet and TV Services

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WINNIPEG, Manitoba — Jan. 17, 2008Continuing to lead the Canadian telecommunications sector when it comes to delivering TV service, MTS Allstream Inc. (MTS Allstream) announced today that it will move forward with steps to introduce next-generation high-speed Internet and TV services to Manitoba customers, with more high-definition TV (HDTV) offerings, personal and digital video recorder (PVR and DVR) functionality, improved guide features and other advances. The new services will be powered by a combination of network connectivity provided by Alcatel-Lucent Canada Inc. (Alcatel Lucent Canada) and the award-winning Microsoft Mediaroom Internet Protocol Television (IPTV) and multimedia platform.

MTS Allstream is entering into agreements with both Microsoft and Alcatel-Lucent that will enable the company to introduce an initial set of services on a limited basis in 2008. A trial location outside of Winnipeg is being considered.

“This is an evolution of our existing Internet and MTS TV services, and positions MTS Allstream to continue its success as Manitoba’s telecommunications provider of choice, be it local service, high-speed Internet, television or wireless,” said Kelvin Shepherd, president, Consumer Markets Division, MTS Allstream. “Leveraging the broadband network and MTS TV investments we have made over the past several years, we will be adding the established and successful Microsoft Mediaroom solution to extend our current proven digital TV platform. Together with connectivity from Alcatel-Lucent, this will provide the basis for not only advanced TV services, but improvements to our high-speed Internet service, and the opportunity for new services and features that cross the different platforms we offer, including wireless. This will reinforce the success of our bundling strategy, and the competitive strength of our business without impacting our capital spending in 2008.”

“As the television becomes connected to the broadband network and powerful software is added, new connected TV experiences become possible, so people can connect with their favorite content, services, devices and people,” said Christine Heckart, general manager of marketing for Microsoft TV at Microsoft Corp. “Together with Alcatel-Lucent and Microsoft, MTS Allstream is very well positioned to offer a way for its customers to experience the next generation of television, featuring entirely new connected TV services.”

“As the world leader in both IPTV and Mobile TV deployment, we are bringing our real-world experience and knowledge to help MTS Allstream move to the next generation of information, communications and entertainment experiences for their customers,” said Alex Giosa, president of Alcatel-Lucent Canada. “We also support MTS Allstream’s time-to-market objectives by implementing a secure and reliable infrastructure capable of delivering high-end multimedia services.”

Further details on the introduction of these new services will be provided over the next several months.

About MTS Allstream

MTS Allstream Inc. is a wholly owned subsidiary of Manitoba Telecom Services Inc., and is one of Canada’s leading national communication solutions providers, delivering innovative products and services through the Enterprise Solutions and Consumer Markets divisions. The Enterprise Solutions division, which operates under the Allstream brand nationally and under the MTS brand in Manitoba, is a leading competitor in the national business and wholesale markets. This division offers customers a portfolio of solutions tailored to the needs of medium and large businesses looking for success in a world of rapidly evolving technology – Internet protocol-based communications, unified communications, voice and data connectivity services. The Consumer Markets division leads every telecommunications market segment in Manitoba, delivering a full suite of next generation wireless, high-speed Internet and data, digital television and wireline voice services under the MTS brand, as well as small business services across Canada under the Allstream brand, and security and alarm monitoring services through AAA Alarm Systems Ltd., an affiliate of MTS Allstream which also operates in other western provinces. MTSAllstream’s extensive national broadband fibre optic network spans more than 24,300 kilometres, and provides international connections through strategic alliances and interconnection agreements with other international service providers. Manitoba Telecom Services Inc.’s common shares are listed on The Toronto Stock Exchange (trading symbol: MBT). For more information, please visit: www.mtsallstream.com.

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