MTS Allstream Acquires Delphi Solutions

TORONTO -- MTS Allstream Inc. today announced that it has acquired all of the issued and outstanding shares of Delphi Solutions Corp. ("Delphi") for approximately $15 million cash. For Allstream, the National division of Manitoba Telecom Services Inc. ("MTS"), the acquisition is an important step in positioning the company to take advantage of the migration of customer networks to converged Internet Protocol ("IP") technologies.

"With this acquisition, Allstream strengthens its competitive position associated with the sale, installation and maintenance of customer premise- based telecommunications equipment, either customer or third-party owned; this supports our converged services portfolio and enhances our ability to effectively sell new IP-based solutions," said Bill Fraser, Chief Executive Officer, MTS. "In addition, we gain new opportunities to drive incremental business by leveraging both companies' strong customer relationships and technical capabilities."

Delphi provides telecommunications products and services to more than 20,000 business and government organizations across Canada, and also has some limited presence in the United States. Delphi's customer base primarily consists of mid-sized companies, making it an ideal complement to Allstream's focus on the large enterprise segment and strengthening the Company's position in the mid-market space. As such, Delphi also provides Allstream with an excellent opportunity to enhance its existing sales channels.

With 180 employees, Delphi has a strong presence in most major Canadian cities. The senior management of Delphi will remain with the organization and contribute to Allstream's ongoing success. "We are very excited to join forces with Allstream," said Ed Lavin, President, Delphi. "By combining the expertise and resources of our companies, we will be able to offer our customers more choice including access to Allstream's extensive and growing portfolio of IP services - all backed up by the financial strength of MTS Allstream."

Commenting on the transaction, Fraser said, "The acquisition of Delphi is complementary to Allstream's existing business, and is consistent with our plans to grow our national capabilities. MTS has a long track record of prudently investing in businesses that leverage our core competencies - and this acquisition is consistent with that philosophy."

Allstream Corp.

Manitoba Telecom Services Inc.