Manitoba Telecom Services Inc. announces receipt of Court's decision
regarding pension lawsuit

Stock Symbol: MBT

WINNIPEG , Jan. 19 /CNW/ - Manitoba Telecom Services Inc., including its principal operating subsidiary MTS Allstream Inc. (herein collectively referred to as either the "Company" or "MTS"), announced today that the Court of Queen's Bench of Manitoba has ruled on a lawsuit regarding the 1997 initial funding, ongoing surplus and governance of the MTS Pension Plan.

In its decision, the court upheld the governance of the pension plan and affirmed the position of the Company with respect to the issue of ongoing surplus. As a result, there will be no changes to the Company's expected future ongoing funding requirements and administration of the MTS Pension Plan. The Court also ruled that MTS was obligated to make a $43 million one-time payment, retroactive to 1997, the year the Company was privatized and the MTS Pension Plan was implemented. The Company believes, based on legal advice received, that key aspects of this part of the decision are flawed and present strong grounds for appeal.

"MTS Allstream has always provided strong support for the MTS Pension Plan and we are pleased that the Court has affirmed the governance of the plan," said Chris Peirce , Chief Corporate Officer, MTS Allstream Inc. "However, in order to reach the decision regarding the $43 million one-time payment, the Court has set aside the critically important opinion of an independent actuary appointed by the Provincial Auditor of Manitoba and substituted its own opinion. We continue to believe that the Company has complied with all of the requirements of the Pension Benefits Standards Act as well as the provincial legislation that privatized MTS and led to the creation of the MTS Pension Plan. Accordingly, we will appeal the Court's decision."

Pending the outcome of an appeal, the financial implications of the Court's decision could result in a one-time future payment of approximately $100 million . This would be comprised of $43 million plus interest calculated at a rate equal to the pension plan's rate of return since 1997. The Company expects that such a payment, if any, would not be required until all appeals have been determined. Importantly, however, there will be no increase to the Company's ongoing pension funding requirements as a result of this decision.

About MTS Allstream

MTS Allstream is 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. MTS Allstream is a proud sponsor of Cindy Klassen , 2006 World Champion and Canada's greatest Olympian, and a proud contributor to the Canadian Museum for Human Rights. Manitoba Telecom Services Inc.'s common shares are listed on The Toronto Stock Exchange (trading symbol: MBT). Customers, stakeholders and investors who want learn more about MTS Allstream services, markets, community commitments and record of creating shareholder value are encouraged to visit: www.mtsallstream.com.

Forward-looking Statements Disclaimer

This news release includes forward-looking statements and information (collectively, the "statements") that are subject to risks, uncertainties and assumptions based on the ultimate consequences and disposition of any appeals of the court ruling. As a consequence, actual results in the future may differ materially from any such forward-looking statements. Forward-looking statements reflect our expectations as the date hereof. Except as required by law, 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.

%SEDAR: 00003357E

For further information: Media: Greg Burch, MTS Allstream Corporate Communications, [phone], [phone], [email protected]; Investors: Paul Peters, MTS Allstream Investor Relations, [phone], [email protected]