Allstream's fourth quarter IP revenues climb by 9.7%

Company's investment in IP fibre network expansion finishes 2010 off strongly

Stock Symbol: MBT

TORONTO, Feb. 1 /CNW/ - MTS Allstream today announced fourth quarter revenue growth of 9.7 per cent for its national enterprise division's flagship product line, converged IP, which now represents 27 per cent of Allstream's overall revenues. This level of growth reflects increased sales of IP in previous quarters and represents a marked improvement from the level of growth experienced in the first three quarters of 2010.

"We believe our strategy of expanding our fibre IP network is starting to show results as we work to reduce low-margin legacy revenues and bring more business onto our own fibre network," said Pierre Blouin, CEO of MTS Allstream. "We are very pleased with the traction we gained in the marketplace in 2010, and believe Allstream's fourth quarter IP results are indicative of our ability to deliver double digit IP revenue growth in 2011."

In support of its strategy to focus on winning high-margin on-net business and driving growth in IP services - the fastest growing segment of the business telecom market - in 2010 Allstream launched a targeted investment program to expand its IP fibre access to an additional 675 multi-tenant buildings over three years.

In connection with this targeted investment program, Allstream won 52 new IP contracts in the fourth quarter of 2010 bringing the total IP contracts Allstream has won through this initiative to 139 as at December 31, 2010. This includes several follow on sales that have increased our penetration into these newly connected buildings. In 2010, Allstream connected fibre to 89 new buildings in connection with this specific program, and won 139 new IP contracts. Allstream has also achieved an additional 102 IP contracts in the expanded Allstream IP co-location footprint.

Management expects to extend Allstream's fibre network to an additional 180 buildings in 2011. Based on the sales cycle for business customers, benefits from this fibre investment program are anticipated to begin to positively impact Allstream's financial results in 2011. As recently announced, Allstream's converged IP revenues are expected to grow by 10 per cent to 12 per cent annually over the next three years.

In the fourth quarter, some of the customers that signed contracts to connect to Allstream's 30,000 kilometre national IP fibre network included: Ontario Health Quality Council, Melcor Developments, Teshmont Consultants LP, Partners in Credit, SS&C Technologies Canada, Techtronic Industries Canada, Mobile Knowledge, Le Groupe PPP, Roberts Communications and TransGlobe Property Management Services.

About Allstream

Allstream is Canada's all-business communications provider, focusing and delivering on the business customer's solutions. For more information on Allstream services and solutions, please visit www.allstream.com.

Allstream is a division of MTS Allstream Inc., a wholly-owned subsidiary of Manitoba Telecom Services Inc. As one of Canada's leading national communication solutions companies, MTS Allstream provides innovative communications for the way Canadians want to live and work today. The Company has more than 100 years of experience, with 6,000 employees across Canada dedicated to a mission of delivering true value as seen through the eyes of our customers. MTS Allstream has nearly two million total customer connections spanning business customers across Canada and residential consumers throughout the province of Manitoba. The Company's extensive national broadband and fibre optic network spans almost 30,000 kilometres. Manitoba Telecom Services Inc.'s common shares are listed on Toronto Stock Exchange (trading symbol: MBT). Customers, stakeholders and investors who want to learn more about MTS Allstream are encouraged to visit: www.mtsallstream.com.

Forward-looking Statements Disclaimer

This news release includes forward-looking statements and information (collectively, the "statements") about our corporate direction, business opportunities, operations, financial objectives, planned activities, future financial results and performance that are subject to risks, uncertainties and assumptions. As a consequence, actual results in the future may differ materially from any conclusion, forecast, anticipation or projection in such forward-looking statements. Examples of statements that constitute forward-looking information may be identified by words such as "believe", "expect", "project", "should", "anticipate", "could", "target", "forecast", "intend", "plan", "outlook", "see", "set", "pending", and other similar terms.

Factors that could cause anticipated opportunities and actual results to differ materially include, but are not limited to, matters identified in the "Risks and Uncertainties" section and elsewhere in our most recent annual MD&A and any subsequent quarterly MD&As, as well as our most recent Annual Information Form, all of which are available on SEDAR at www.sedar.com.

Please note that forward-looking statements reflect our expectations as at the date hereof. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise except as required by law.

SOURCE MTS Allstream Inc.

For further information: Media: Gillian Giesbrecht, Corporate Communications, (204) 958-3392, (204) 223-1934, media.relations@mtsallstream.com; Investors: Paul Peters, Investor Relations, (204) 941-6178, investor.relations@mtsallstream.com

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MTS Allstream Inc.

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