Manitoba Telecom Services Inc. Updates 2009 Outlook

    
    Stock Symbol: MBT

    This news release contains forward-looking statements. For a description
    of the related risk factors and assumptions, please see the section
    entitled "Forward-looking Statements Disclaimer" later in this news
    release. This release should be read in conjunction with the Risk Factors
    disclosed in Manitoba Telecom Services Inc.'s second quarter 2009 interim
    Management's Discussion & Analysis dated August 6, 2009 (available at the
    Investors section of www.mtsallstream.com), which are incorporated by
    reference in this release.
    

WINNIPEG , Oct. 7 /CNW/ - Manitoba Telecom Services Inc. (the "Company") today updated its financial outlook for 2009 to reflect the impact the recession and the slow pace of economic recovery are having principally on the Company's Enterprise division. The Company's revised outlook primarily reflects a sharper than expected decline in its legacy long distance business, as well as in the unified communications business.

MTS is continuing to achieve strong results and growth in its Consumer Markets division and to benefit from exposure to the resilient Manitoba economy. Converged IP, the largest and fastest-growing product line within the Company's Enterprise Solutions division, also continues to deliver solid growth.

"The growth businesses like wireless, broadband and Converged IP that will define our long-term success continue to perform well despite the economy. Our legacy Enterprise long-distance business, however, is declining faster than anticipated," said Pierre Blouin , Chief Executive Officer. "This is having a near-term impact on our financial results but has done nothing to undermine our positive long-term outlook. We are taking the appropriate steps to position the Company to benefit when the economy recovers, including our targeted cost reductions which are expected to achieve $50 million to $60 million of annualized savings in 2009."

Based on preliminary results for the third quarter, management is providing the following update to its previous outlook, which is still in line with the current analysts' consensus forecasts:

    
    Financial Outlook (Continuing Operations(1))
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                             Updated 2009 Outlook      Prior 2009 Outlook(2)
    -------------------------------------------------------------------------
    Revenues                 $1.855 B to $1.900 B      $1.900 B to $1.980 B
    -------------------------------------------------------------------------
    EBITDA(3)                    $625 M to $645 M          $645 M to $685 M
    -------------------------------------------------------------------------
    Earnings per share             $2.60 to $2.90       Approximately $2.80
    -------------------------------------------------------------------------
    Free cash flow(4)            $230 M to $250 M          $250 M to $280 M
    -------------------------------------------------------------------------
    

More information on the updated financial outlook, including the financial results for the third quarter and first nine months of the year, will be provided in conjunction with the Company's third quarter results release on November 5, 2009 .

About MTS Allstream

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. In 2008, MTS Allstream had 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 to 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") about the transactions announced herein that are subject to risks, uncertainties and assumptions. As a consequence, actual results in the future may differ materially from any conclusion, forecast or projection in such forward-looking statements. Forward-looking statements reflect our expectations as at the date hereof. 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. Many factors could cause anticipated opportunities and actual results to differ materially from those expected, and several material factors and assumptions were applied in drawing conclusions or making a forecast or projection set out in such forward-looking statements. 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.

The outlook and financial information contained in this news release have been reviewed by the Company's Audit Committee and approved by the Board of Directors.

    
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    (1) Continuing Operations in 2009 excludes restructuring costs; the costs
        to transition certain wireless service requirements away from Bell
        Mobility to new suppliers and to our wireless platform; costs related
        to our wireless evolution; costs related to certain regulatory
        proceedings; certain costs associated with our transition from
        Canadian Generally Accepted Accounting Principles ("Canadian GAAP")
        to International Financial Reporting Standards; and solvency funding
        to our pension plans.
    (2) As announced in December 2008, except for earnings per share, which
        was updated with the release of the Company's second quarter 2009
        results.
    (3) EBITDA is defined as earnings before interest, taxes, amortization
        and other income. EBITDA should not be construed as an alternative to
        operating income or to cash flows from operating activities (as
        determined in accordance with Canadian GAAP) as a measure of
        liquidity.
    (4) Free cash flow is defined as cash flow from operating activities,
        less capital expenditures, and excluding changes in working capital.
    

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