PricewaterhouseCoopers Canada to acquire MTS Allstream's non-telecom IT
consulting business

Transaction strengthens MTS Allstream's focus on core enterprise solutions delivery and service capabilities

Stock Symbol: MBT

TORONTO , Jan. 12 /CNW/ - MTS Allstream Inc. ("MTS Allstream" or "the Company") today announced that PricewaterhouseCoopers Canada ("PwC") has entered into an agreement to acquire the majority of MTS Allstream's non-telecom IT consulting group, which comprises approximately 180 employees. This transaction strengthens MTS Allstream's competitive focus on its core enterprise telecommunications delivery and service capabilities across Canada . MTS Allstream will retain the telecom-related aspects of its consulting business such as managed security services that will continue to complement the Company's communications services portfolio.

As part of the transaction, MTS Allstream is also announcing an alliance between MTS Allstream and PwC. Through this alliance, PwC customers looking for communications solutions services will be referred to MTS Allstream, while MTS Allstream customers who require the support of a non-telecom IT consulting group will be referred to PwC.

"This transaction represents a renewed focus on our core business offerings like Unified Communications and Converged IP Services - key areas of growth for MTS Allstream," said Dean Prevost , President, Allstream. "As customers continue to migrate to IP-based services, we are refining our market focus to create more innovative IP solutions while reducing our cost structure yet allowing for IT consulting to remain part of our broader toolkit for customers. Our customers will also benefit from a new relationship with PwC, a Canadian leader that will continue to provide outstanding service for their IT consulting needs."

"PwC Consulting will now be able to leverage the expertise of this group and their network of vendor and subcontractor relationships to greatly expand our technology service offerings," said Bill McFarland, a National Managing Partner within PwC Canada . "This acquisition immediately enhances our ability in the marketplace, to provide an expanded base of clients with full-service value - from strategy through to implementation."

Financial terms of the transaction are not being disclosed. The business that is being acquired by PwC represents annual revenues of approximately $50 million with a lower margin that is not consistent with the returns of MTS Allstream's core communications business. Given that PwC is a leading professional services firm with extensive consulting capabilities, the business should achieve greater success in their market.

MTS Allstream and PwC expect a seamless transition over the next six months. The transaction is expected to close on January 31, 2010 .

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 to learn more about MTS Allstream services, markets, community commitments and record of creating shareholder value are encouraged to visit: www.mtsallstream.com.

About PricewaterhouseCoopers LLP

PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory (consulting and deals) services to build public trust and enhance value for its clients and their stakeholders. More than 163,000 people in 151 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice. In Canada , PricewaterhouseCoopers LLP (www.pwc.com/ca) and its related entities have more than 5,300 partners and staff in offices across the country.

PwC Consulting, teams directly with clients to help them achieve real success as they seek to transform their businesses. We invest in long-term client relationships to be the partner of choice in designing, managing, implementing and executing lasting change. We address issues impacting our clients by delivering our Global capabilities in the areas of strategy, operations, finance, people & change, risk and technology.

"PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership, or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity.

Forward-looking Statements Disclaimer

This news release includes forward-looking statements and information (collectively, the "statements") about the transaction announced herein that are subject to closing conditions, 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. 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.

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