MANAGEMENTIS DISCUSSION AND ANALYSIS by wulinqing

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									ManageMent’s Discussion anD analysis
       For the three months ended
        March 31, 2010 and 2009




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interiM ManageMent’s Discussion anD analysis

May 4, 2010

The following management’s discussion and analysis (“MD&A”) of GLENTEL Inc. (“Glentel” or “the
Company”) describes our business, the business environment as we see it today, our vision and strategy,
as well as the critical accounting policies used in our Company that will help you understand our
interim consolidated financial statements. This report should be read together with the Company’s
unaudited interim consolidated financial statements and accompanying notes included therein for the
three-month periods ended March 31, 2010 and 2009, and the Company’s audited annual consolidated
financial statements, accompanying notes included therein, and management’s discussion and analysis
included in the 2009 Annual Report. All of GLENTEL’s financial statements have been prepared in
accordance with Canadian generally accepted accounting principles (“GAAP”). All financial amounts are
expressed in Canadian dollars. Additional information, including the Company’s Annual Information
Form (“AIF”), can be obtained from the System for Electronic Document Analysis and Retrieval (“SEDAR”)
on the Internet at www.sedar.com.

ForwarD-looking stateMents
Certain statements in this report may constitute forward-looking statements. Such forward-looking
statements involve risks, uncertainties, and other factors which may cause actual results, performance,
or achievements of the Company to be materially different from any future results, performance, or
achievements expressed or implied by such forward-looking statements. Included herein is a “Caution
Concerning Forward-Looking Statements” section that should be read in conjunction with this report.

overview
GLENTEL operates two distinct divisions. The Retail Division, doing business as (“dba”) WirelessWave,
The Telephone Booth (“Tbooth / la cabine T”) and WIRELESS etc., provides personal wireless and wired
communications products and services, and choice of mobile phone network carrier to consumers
through retail stores in major shopping malls, retail locations, and Costco Wholesale stores in Canada.
The Business Division provides its public and private sector customers with integrated wireless solutions
– designing and commissioning wireless networks for applications in the core technical areas of
terrestrial radio systems and satellite network services.

overall PerForMance
Consolidated sales grew 11% to $74,785,000 for the 1st quarter compared to $67,444,000 in 2009.
Highlights of GLENTEL’s 2010 operating results:
•	 In	the	1st	quarter	of	2010,	sales	of	retail	mobile	phone	products	and	services	in	the	Retail	Division	
   grew 9% to $63,255,000 in 2010 compared to $57,823,000 in 2009.

•	 In	the	Business	Division,	sales	of	terrestrial	narrowband	and	broadband	radio	systems,	satellite	
   network services, and implementation services in the division grew 20% to $11,530,000 in the 1st
   quarter of 2010 compared to $9,621,000 in 2009.

•	 Consolidated	net	income	and	basic	earnings	per	share	for	the	1st	quarter	March	31,	2010	were	
   $2,327,000, $0.21 per share, compared to $2,416,000, $0.22 per share, the previous year.




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interiM ManageMent’s Discussion anD analysis

suMMary oF consoliDateD Quarterly results
(In thousands, except per share amounts)
                                                                                       Years Ended December 31
                                                     2010                             2009                                       2008
                                                    Mar 31      Dec 31          Sep 30 Jun 30 Mar 31 Dec 31                     Sep 30       Jun 30
                                                         $            $              $          $           $            $            $            $
Sales (1)                                           74,785       90,895         81,905     67,849      67,444       87,507       90,614       60,494
Operating income before goodwill
  impairment, interest and taxes                     3,411         8,238         8,856      3,897        3,513        7,867       9,685        2,640
Goodwill impairment (2)                                  -              -            -          -            -       (4,625)          -            -
Operating income before interest
  and taxes                                          3,411         8,238         8,856      3,897        3,513        3,242       9,685        2,640
Net income                                           2,327         5,058         5,834      2,644        2,416          897       6,550        1,819
Net income per common share (2)
  Basic                                                0.21         0.46          0.53       0.24         0.22         0.08         0.61         0.17
  Diluted                                              0.21         0.45          0.52       0.24         0.22         0.08         0.59         0.16
(1) Historically, the Company’s business is stronger during its 3rd and 4th quarters, while the 1st quarter is generally the weakest quarter of the
    year. This seasonal pattern is tied closely to traditional cycles in consumer spending.
(2) During the 4th quarter of 2008, the Company performed its normal course annual impairment test of goodwill and determined that goodwill
    related to its Business Division was impaired and recorded a charge of $4,625,000, which reduced basic earnings per share by $0.41 in the 4th
    quarter of 2008.

results oF oPerations - analysis oF First Quarter oPerating results
(Comparison of 1st Quarter ended March 31, 2010 versus March 31, 2009)
Sales for the 1st quarter ended March 31, 2010, increased 11% to $74,785,000 compared to $67,444,000
in the 1st quarter of 2009. Operating income before impairment of goodwill, interest and taxes was
$3,411,000 compared to $3,513,000. Consolidated net income and basic earnings per share for the three
months ended March 31, 2010 were $2,327,000, $0.21 per share, compared to $2,416,000, $0.22 per
share, for the same period the previous year.

Retail Division
In the 1st quarter, sales of retail mobile phone products and services in the Retail Division grew 9% to
$63,255,000 in 2010 compared to $57,823,000 in 2009. Operating income before interest and taxes for
the division was $6,380,000 for the 1st quarter of 2010, compared to $7,026,000 the same period the
previous year.
In the 1st and 2nd quarters of 2009, the Canadian wireless industry experienced significant growth
with consumers’ acceptance of Smartphone technology. The Retail Division capitalized on that trend
to produced strong sales. In the 4th quarter, net subscriber additions across the wireless industry were
down and this carried over into the 1st quarter of 2010. As a result, the Retail Division saw a 2% growth
in same-store activations of mobile phones and other wireless devices sold in stores that were open
throughout both 2010 and 2009. The 9% growth in sales was mainly due to the division operating 269
stores in the 1st quarter, compared to 252 at the end of 1st quarter 2009.
During the quarter, the Retail Division added one new WirelessWave mall-based store. The Division
currently operates 116 WirelessWave mall-based stores and retail locations, 77 Tbooth / la cabine T
mall-based stores, and 76 WIRELESS etc. stores in Costco Wholesale in Canada. In addition, the division
completed the refresh of eight WirelessWave and Tbooth/la cabine T stores during the quarter.


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interiM ManageMent’s Discussion anD analysis

Operating expenses for the 1st quarter of 2010 increased to $19,655,000 compared to $16,727,000 in
the same quarter in 2009. This was due to the increased number of stores operating in 2010 versus in
2009 and to minimum wage increases that took place in most provinces in 2010.
For the 1st quarter of 2010, amortization expense of property, equipment, and intangible assets was
$1,031,000 compared to $771,000 in the quarter in 2009. This has increased due to store growth.
In the 4th quarter of 2009, inventory grew to support the seasonal sales cycle, and the division began
to see the effect of providing the broad range of choice of high-priced Smartphone devices supported
by each of its mobile phone network carriers. In the 1st quarter 2010, inventory levels decreased as
expected and are comparable to levels of the same period last year. Management will continue to
actively manage working capital levels.
With the introduction of the new entrants to the wireless marketplace, the incumbents are expected to
react with more attractive sales and marketing programs in the 2nd quarter. Also, manufacturers will be
launching new Smartphones on the Android software platforms. The Retail Division continues to focus
on the sale of Smartphones and quality activations, which can provide the highest yield per store.
The award-winning Retail training program known as Wireless Academy is being revamped and has
been renamed the Glentel University. Our trained sales force is the most knowledgeable in the industry,
and all of our training programs are being reworked to reflect the reality of 2010 and the future.

Business Division
In the 1st quarter, sales of terrestrial narrowband and broadband radio systems, satellite network
services, and implementation services in the division were $11,530,000 in 2010 compared to $9,621,000
in 2009. Operating income before interest and taxes for the division for the 1st quarter of 2010 was
$77,000 compared to a loss of $93,000 the same period the previous year.
The performance of the Business Division in the 1st quarter marked an improvement in financial results
with increased sales from the successful completion of the installation phase of some large projects
that had been negotiated in 2009.
During the quarter, the division completed a large team reorganization focusing on reducing human
resource and fixed costs and consolidating business operations. These changes resulted in restructuring
costs of $230,000, which were absorbed in the quarter. The division continues to follow the strategic sales
plan and in the 1st quarter established an inside business development team. A technical presales team
and a project management team have been established to support the field in selling and executing
complex communication solutions. A national technical helpdesk has been created, allowing the division
to maximize the effective use of the field maintenance team.
In the 2nd quarter of 2010, the Business Division will continue to focus on executing the core business
plan, driving business process efficiencies, raising the skills of the team, and removing non-core
activities from the portfolio.
Operating expenses for the 1st quarter of 2010 increased to $3,208,000 in 2010 compared to $2,941,000
the previous year.
For the 1st quarter of 2010, amortization expense of property, equipment, and intangible assets was
$691,000 compared to $569,000 in 2009.

CoRpoRate opeRations
Operating and administrative expenses for the 1st quarter ended March 31, 2010 were $2,881,000
(3.9% of sales) compared to $3,267,000 (4.8% of sales) the previous year. The majority of this decrease in
expenses was a result of professional service fees (approximately $475,000) incurred in 2009 related to
corporate development activities which did not re-occur in the 1st quarter 2010. Included in general and
administrative expenses is stock-based compensation expense of $1,000 (2009 - $20,000).


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interiM ManageMent’s Discussion anD analysis

In December 2009, the Company filed a Notice of Intention to renew its Normal Course Issuer Bid with
the TSX pursuant to which GLENTEL indicated that, for the period from December 29, 2009 to December
28, 2010, it intends to acquire up to 250,000 Common Shares of the Company. For the period from
January 1, 2010 to March 31, 2010, a total of 146,500 common shares were repurchased at an average
price of $15.21 per share, for an aggregate price of $2,229,000.

liQuiDity
Cash, Cash equivalents, anD shoRt-teRM investMents
The Company’s cash, cash equivalents, and short-term investments balance increased to $20,068,000
at March 31, 2010 compared to $16,146,000 at December 31, 2009. Working capital decreased to
$43,683,000 at March 31, 2010 compared to $46,241,000 at December 31, 2009.

opeRating aCtivities
For the three months ended March 31, 2010, cash generated from operating activities after adjusting
for net change in non-cash working capital was $9,727,000 compared to $3,043,000 generated by
operating activities in the same period last year. The Company generated $1,922,000 from operations,
before net change in non-cash working capital, compared to $1,506,000 in 2009. Cash generated
from the change in non-cash working capital was $7,805,000 compared to $1,537,000 generated by
non-cash working capital during the same period the previous year. The increase in cash generated by
non-cash working capital was primarily the result of a decrease in accounts receivable and inventory
balances. These balances typically decrease after the 4th quarter buildup of inventory and accounts
receivables, which are required to support the increased sales during the 4th quarter. This was offset by
a decrease in accounts payable and accrued liabilities resulting from payments made to vendors from
the inventory buildup for 4th quarter sales.

FinanCing aCtivities
During the three months ended March 31, 2010, cash used for financing activities was $3,289,000,
compared to $1,212,000 during the same period last year. During the 1st quarter, the Company
received $117,000 ($145,000 in 2009) on the exercise of stock options. The Company used $2,229,000 to
repurchase shares under a normal course issuer bid ($32,000 in 2009). During the 1st quarter, $89,000
was used for the repayment of long-term debt, compared to $436,000 in the same period the prior
year. On January 29, 2010, the Company paid a quarterly dividend of $0.0975 per share, for a total of
$1,088,000 ($889,000 in 2009).
On April 1, 2010, the Company declared a quarterly dividend of $0.0975 per common share with a
record date of April 16, 2010, payable April 30, 2010, for a total of approximately $1,076,000.

investing aCtivities
During the three months ended March 31, 2010, $2,562,000 cash was used for investing activities,
compared to $641,000 generated from investing activities during the same period the previous year.
During the 1st quarter, the Company set aside $46,000 of its excess cash in short-term investments that
are highly liquid money market instruments with maturities greater than three months from the date
of acquisition. In 2009, the company received $2,130,000 from the maturity of short-term investments.
During the 1st quarter, $2,541,000 was used to acquire property and equipment. The Retail Division
used $1,141,000 to acquire property and equipment for store renovations and the new store that
opened in the quarter. The Business Division used $1,275,000 primarily to acquire rental pool and service
equipment during the quarter. The Corporate Division used $125,000 in the quarter, for enhancements
of its communications technology and computer systems infrastructure. In addition, $25,000 was
received from proceeds on sale of vehicles under capital leases during the 1st quarter.



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interiM ManageMent’s Discussion anD analysis

The Company anticipates that its cash and cash equivalents, short-term investments, cash flow from
operations, and credit facility will be sufficient to fund future operations, capital expenditures, and
dividends. The Company’s current plan is to continue to finance its planned growth through internally
generated funds. From time to time the Company will explore potential acquisitions and incur associated
due diligence costs.

suMMary oF contractual obligations
As at March 31, 2010 (In thousands of dollars)
                                                                     Payments Due by Period
                                                               Less than                                    After
                                                     total        1 year      1-3 Years       4-5 Years   5 Years
                                                        $             $              $               $         $
Long-term debt, including interest                   788             71            142            142       433
Capital lease obligations, including interest        748           303             367              78         -
Operating leases                                   54,794       12,392          20,688         13,103     8,611
Other long-term obligations                          751           169             305              73      204
total contractual obigations                      57,081        12,935         21,502          13,396     9,248


caPital resources
The Company has a $5,000,000 revolving operating facility with a major Canadian chartered bank. This
major Canadian chartered bank also provides a $25,000,000 extendible term revolving committed
facility to be used for business acquisitions and/or capital expenditures. The facility bears interest
ranging from the bank’s prime rate to prime rate plus 0.75% subject to certain financial ratios, and is
secured by a general security agreement over the Company’s assets. At March 31, 2010, the operating
bank indebtedness was $nil.
The Company has outstanding a further arrangement with the same Canadian chartered bank, a
$574,000 fixed-term loan, secured by the building in Fort St. John, which is repayable in monthly
installments of $5,925 including interest at the rate of 6.02% per annum.
At March 31, 2010, the Company had a liability of $686,000 in respect of vehicles under capital leases
for terms ranging from 48 months to 60 months, which are repayable in monthly installments of
approximately $23,000 plus interest at rates ranging from 3.13% to 9.35%.
The Company’s borrowing facilities contain certain restrictive covenants, which the company was in
compliance with as at March 31, 2010.
The Company’s objective when managing capital is to provide sufficient capacity to cover normal
operating and capital expenditures, as well as acquisition growth, while maintaining an adequate
return for shareholders. The Company defines its capital as the aggregate of long-term debt (including
the current portion) and shareholders’ equity. The Company manages its capital structure to maintain
the flexibility to adjust to changes in economic conditions and acquisition growth and to respond to
interest rate, foreign exchange, credit, and other risks. In order to maintain or adjust its capital structure,
the Company may purchase shares for cancellation pursuant to normal course issuer bids, issue new
shares, or raise or retire debt.




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interiM ManageMent’s Discussion anD analysis

oFF-balance sheet arrangeMents
The Company has outstanding letters of credit totaling $40,000 (December 31, 2009 - $40,000) that have
been issued as security for the Company’s obligations under a contract.
The Company has Performance and Labour & Material Payment bonds with a major Canadian surety
company totaling $2,326,000, which were required for a certain customer contract.

transactions with relateD Party
The Company had the following transactions with a major shareholder:
(In thousands of dollars)
                                                                           Three Months Ended March 31
                                                                                  2010                   2009
                                                                                     $                     $
 Administrative services fee                                                        56                    53
 Construction services and marketing materials                                     643                   515

During the three-month period, the company paid a fee to TCGI International (“TCGI”), for certain
operating and administrative services provided to the Company by TCGI which resulted in an
administrative services fee of $56,000 as agreed to by the Board of Directors. In addition, the Company
paid $643,000 for store construction and marketing materials provided by a subsidiary of TCGI during
the year. These related-party transactions were recorded at the exchange amount, which is the amount
of consideration paid as established and agreed to by the related parties.
TCGI, which is directly and indirectly owned or controlled by the families of Thomas Skidmore, Allan
Skidmore, and Arthur Skidmore, owns approximately 9.6% of the outstanding shares of the Company.
Messrs Thomas, Allan and Arthur Skidmore are directors of GLENTEL.

ProPoseD transactions
Effective April 1, 2010, the Company disposed of the London and Sarnia branches of its Business
Division through a management agreement with a local dealer for $377,100 to be paid in monthly
installments of $12,570.

outstanDing share Data
As at March 31, 2010, GLENTEL had 11,038,370 common shares issued and outstanding. As at May
4, 2010, the Company has repurchased for cancellation pursuant to a normal course issuer bid
an additional 12,300 common shares and as a result had 11,026,070 common shares issued and
outstanding at that date. There are also 293,500 options outstanding that entitle the holder to purchase
one common share per share option of GLENTEL at prices ranging from $0.95 to $7.25.

Disclosure controls anD ProceDures
As defined in National Instrument 52-109 of the Canadian Securities Administrators, the Company’s
management, including the Chief Executive Officer and Chief Financial Officer, has evaluated the
effectiveness of disclosure controls and procedures as at March 31, 2010.
Disclosure controls and procedures are designed to provide reasonable assurance that all necessary
information is reported to the CEO and CFO on a timely basis to ensure that the necessary decisions can
be made regarding annual and interim financial statement disclosure.


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interiM ManageMent’s Discussion anD analysis

The certifying officers have evaluated the effectiveness of the disclosure controls and procedures as at
March 31, 2010, and have concluded that such controls and procedures are adequate and effective to
ensure accurate and complete disclosures in the annual filings.

internal controls over Financial rePorting
The Company’s management is responsible for establishing and maintaining adequate internal control
over financial reporting. Internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles.
Management of the Company, including the Chief Executive Officer and Chief Financial Officer, has
performed an assessment of the effectiveness of the Company’s internal control over financial reporting
as at March 31, 2010 based on the provisions of Internal Control — Integrated Framework issued by
the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this
assessment, management has concluded that its internal controls over financial reporting are operating
effectively as at March 31, 2010. Management determined that there were no material weaknesses in the
Company’s internal control over financial reporting as at March 31, 2010.
There have been no changes in the Company’s internal control over financial reporting during the period
covered by this report that have materially affected, or are reasonably likely to materially affect, the
Company’s internal control over financial reporting.

note regarDing control liMitations
The Company’s management, including the Chief Executive Officer and Chief Financial Officer, does
not expect that the Company’s disclosure controls and procedures or internal control over financial
reporting will prevent all error and fraud. A control system, no matter how well conceived and operated,
can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
Further, the design of a control system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the inherent limitations in all
control systems, no evaluation of controls can provide absolute assurance that all control issues and
instances of fraud, if any, within the Company have been detected. These inherent limitations include
the realities that judgments in decision-making can be faulty and that breakdowns can occur because of
simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some persons, by collusion of
two or more people, or by management override of the control. The design of any system of controls
also is based in part upon certain assumptions about the likelihood of future events, and there can
be no assurance that any design will succeed in achieving its stated goals under all potential future
conditions. Over time, control may become inadequate because of changes in conditions, or the degree
of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a
cost-effective control system, misstatements due to error or fraud may occur and not be detected.

aDoPtion oF accounting Policies
The Company did not adopt any new accounting policies.




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interiM ManageMent’s Discussion anD analysis

critical accounting Policies anD estiMates
GLENTEL prepares its consolidated financial statements in conformity with Canadian GAAP. The
preparation of these financial statements requires management to make estimates and assumptions
that affect the reported amounts of assets, liabilities, revenue and expenses. These estimates are based
on historical experience, anticipated results and trends, and on various other assumptions that are
believed by management to be reasonable under the circumstances. On an ongoing basis, management
evaluates its estimates and judgments, particularly the recoverability of accounts receivable, inventory,
property and equipment, intangible assets, and liabilities at the date of the financial statements, the
disclosure of contingent assets, and carrying amount of asset retirement obligation, and the reported
amounts of revenues and expenses during the reporting period. By their nature, estimates are subject to
an inherent degree of uncertainty, and actual results could differ from the estimates.
During the period ended March 31, 2010, except as described in Note 3 of the consolidated financial
statements (“Accounting Policies”), no changes to existing accounting policies were made and no new
accounting policies were adopted that have a material impact on the consolidated financial statements.
Significant accounting policies are described in Note 2 of the Company’s audited consolidated financial
statements for the year ended December 31, 2009.
The following critical accounting policies affect our more significant estimates and assumptions used in
preparing our consolidated financial statements.
Accounts Receivable: The Company maintains an allowance for doubtful accounts for estimated losses
that may occur if customers are unable to make required payments. Management follows conservative
practices in granting trade credit, and diligently practices several credit risk minimizing techniques.
Management specifically analyzes the age of outstanding customer balances, historical bad debt
experience, and changes in customer payment patterns when making estimates of the Company’s
uncollectible accounts receivable balances. These amounts form the basis of the Company’s allowance
for doubtful accounts.
Inventory: The Company values its inventory at the lower of cost and net realizable value. Net realizable
value reflects the current estimated net selling price of the items in inventory in a non-forced sale.
Due to the high rate of technological change, management closely monitors the quality and profile of
inventories to identify items which may present a risk. Once such risk is identified, various strategies are
developed to maximize the realizable value, such as return to the manufacturer, promotional activity
(advertising, markdowns, etc), and finally liquidation. Due to a multi-carrier environment in the Retail
Division, the company’s investment in inventory may increase due to the higher priced Smartphone
devices that are being supported by each of the mobile phone network carriers. Management reviews
inventory item profiles on an ongoing basis, which minimizes overall risk, and updates its estimates of
the amount required for inventory write-downs to reflect such risk. Estimated unrecoverable amounts
are charged to earnings in the period in which the condition is identified. Due to the high rate of
technology change and consumer taste preferences, inventory allowance volatility may increase, which
would negatively impact earnings.
Goodwill, Long-lived and Intangible Assets: The Company assesses the impairment of goodwill and
intangible assets with an indefinite life on an annual basis, and assesses long-lived assets whenever
events or changes in circumstances indicate that the asset might be impaired. Factors which the
Company considers could trigger an impairment review include significant underperformance relative
to plan, a change in the Company’s business strategy, or significant negative industry or economic
trends. When the Company believes that the carrying value of long-lived assets may not be recoverable
based upon the existence of one or more of the above indicators of potential impairment, the Company
determines what impairment, if any, exists based on the fair value of the long-lived asset. The Company
designated December 31 as the date for annual impairment reviews. No impairment charge was
required in 2009.


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interiM ManageMent’s Discussion anD analysis

Future Income Tax Assets: The Company evaluates its future income tax assets to assess whether their
realization is more likely than not. If their realization is not considered more likely than not, a valuation
allowance is provided. The ultimate realization of the future income tax asset is dependent upon
the generation of future taxable income during the periods in which temporary differences become
deductible. Management considers projected future income and tax planning strategies in making its
assessment. If it is determined that the Company would not be able to realize the future tax assets, an
adjustment is made to the future tax assets that would be charged to operations.
Revenue Recognition: The Company includes in revenue all amounts related to the sale of products and
services. Revenue from the sale of personal wireless and wired communications products is recognized
at the point of sale when the services are performed and the risk and reward has transferred to the
customer. Revenue includes activation service fees, enhancements fees, and subsidies relating to the
activation services that are received from mobile phone service providers. In addition, periodic bonus
contributions are received from mobile phone service providers related to activation services provided
and these are recognized in the period the services are performed. Where periodic incentive and service
activation enhancement arrangements exist, the Company considers such payments to represent
separate units of accounting and recognizes such amounts in accordance with EIC-144 “Accounting by a
Customer for Certain Consideration Received from a Vendor” when conditions relating to receipt are met
and the amounts are fixed or determinable. Additional amounts are received for cooperative advertising,
facility upgrades, and similar market development activities. Receipts of this nature are used to offset the
related program expenditures.
Revenue from sales of prepaid calling cards is recognized on a net basis as the company is not the
primary obligor of the related phone service, has no significant continuing obligation with respect to
service, the price to the consumer is fixed or determinable, and collection is reasonably assured.
The Company recognizes revenue from business communications product sales when title transfers,
the risk and rewards of ownership have been transferred to the customer, the fee is fixed and
determinable, and collection of the receivable is reasonably assured, which is generally at the time
of shipment. Revenue from contracts for communication system solution sales are deferred until
technological feasibility is established, customer acceptance is obtained, and other contract-specific
terms have been completed. Revenue for services is recognized ratably over the contract term or as
services are being performed.
Rental revenue from rental of equipment is recognized over the term of the rental agreement. Premium
protection plan revenues are deferred and amortized to sales in the statement of operations on a
straight-line basis over the term of the contract.

new accounting PronounceMents iMPacting 2010 anD later years
The Canadian Institute of Chartered Accountants (CICA) has published the following new accounting standards.
In February 2008, the Canadian Accounting Standards Board confirmed that International Financial
Reporting Standards (“IFRS”) will replace Canada’s current generally accepted accounting principles for
publicly accountable profit-oriented enterprises for interim and annual financial statements effective
January 1, 2011.
The Company has developed a project conversion plan to ensure that differences between Canadian
GAAP and IFRS as they relate to the business are identified and that any required changes to accounting
processes and controls are made in a timely manner to ensure a smooth transition to IFRS.
The Company has established an IFRS project team, led by finance management, to execute elements
of the conversion plan. Initial training has been provided to key employees, and further investment
in training and resources will be made throughout the transition to facilitate a timely and efficient
changeover to IFRS. Regular progress reporting to the Audit Committee on the status of the IFRS
implementation has been instituted.

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interiM ManageMent’s Discussion anD analysis

Our IFRS conversion project consists of four phases:

 iFRs ConveRsion phases   ChaRaCteRistiCs                                                                    status
 SCOPING PhASE            •	   Establish	project	governance	structure
                          •	   Designate	resources	to	the	project
                                                                                                            Complete
                          •	   Raise	awareness	across	the	Company
                          •	   Perform	high-level	diagnostic	assessments	of	accounting	differences
 DETAILED ASSESSMENT      •	 Perform	systematic	and	detailed	gap	analysis	between	Canadian	GAAP	and	IFRS
 PhASE                                                                                                       Ongoing
                          •	 Assess	impact	on	systems	and	processes,	business	activities,	and	people
                                                                                                           through 2010
                          •	 Select	IFRS	accounting	policies	and	election	of	IFRS1exemptions
 DESIGN AND               •	 Develop	implementation	requirements	and	building	processes
 IMPLEMENTATION PhASE                                                                                        Ongoing
                          •	 Prepare	pro-forma	IFRS	financial	statement	and	notes
                                                                                                           through 2010
                          •	 Communication	and	training
 POST-IMPLEMENTATION      •	 Production	of	IFRS	results	(including	dual	reporting	during	fiscal	2010)        Ongoing
 PhASE                    •	 Monitor	transition	progress	and	issue	resolution                              through 2010

The Company has completed the scoping phase and management is currently evaluating the available
exemptions under IFRS 1, First-Time adoptions of IFRS, and their impact on the future financial position
of the Company. Significant efforts are being invested by senior management in evaluating the effects
on recognition, measurement, presentation and disclosures of IFRS that may create material differences
with existing Canadian GAAP, such as: Presentation of Financial Statements (IAS 1); Property, Plant and
Equipment (IAS 16); Impairment of Assets (IAS 36); Income taxes (IAS 12); Employee Benefits (IAS 19); and
Share-Based payments (IFRS 2). This should not be regarded as an exhaustive list of changes expected
on transition to IFRS. At this time, the comprehensive impact of the changeover on the Company’s future
financial position and results of operations is not yet determinable. Management intends to complete
this assessment in time to compile parallel IFRS financial information in 2010.
CICA Handbook Section 1582 “Business Combinations” will replace Section 1581 “Business Combinations.”
This Section improves the relevance, reliability and comparability of the information that a reporting
entity provides in its financial statements about a business combination and its effects. The Section
outlines a variety of changes including, but not limited to, the following: an expanded definition of a
business, a requirement to measure all business combinations and non-controlling interests at fair value,
and a requirement to recognize future income tax assets and liabilities, and acquisition and related costs
as expenses of the period. The Section applies to annual and interim financial statements for fiscal years
beginning on or after January 1, 2011, with early adoption permitted. The Company has not yet reviewed
the impact adopting this section will have on its consolidated financial statements.
CICA Handbook Section 1601 “Consolidated Financial Statements” in combination with Section 1602
“Non-controlling interests” will replace Section 1600 “Consolidated Financial Statements.” Section
1601 establishes standards for the preparation of consolidated financial statements and specifically
addresses consolidation accounting following a business combination that involves the purchase of
an equity interest in one company by another. Section 1602 establishes standards for accounting for a
non-controlling interest in a subsidiary in consolidated financial statements subsequent to a business
combination. The sections apply to annual and interim financial statements for fiscal years beginning on
or after January 1, 2011, with early adoption permitted. The Company has not yet reviewed the impact
adopting this section will have on its consolidated financial statements.




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interiM ManageMent’s Discussion anD analysis

In December 2009, the CICA issued EIC 175, “Multiple Deliverable Revenue Arrangements,” replacing EIC
142, “Revenue Arrangements with Multiple Deliverables.” This abstract was amended to (1) exclude from
the application of the updated guidance those arrangements that would be accounted for in accordance
with Financial Accounting Standards Board Statement (FASB) Statement of Position (SOP) 97-2, Software
Revenue Recognition as amended by Accounting Standards Update (ASU) 2009-14; (2) provide updated
guidance on whether multiple deliverables exist, how the deliverables in an arrangement should be
separated, and the consideration allocated; (3) require in situations where a vendor does not have
vendor-specific objective evidence (“VSOE”) or third-party evidence of selling price that the entity
allocate revenue in an arrangement using estimated selling prices of deliverables; (4) eliminate the use
of the residual method and require an entity to allocate revenue using the relative selling price method;
and (5) require expanded qualitative and quantitative disclosures regarding significant judgments made
in applying this guidance.
The accounting changes summarized in EIC 175 are effective for fiscal years beginning on or after January
1, 2011, with early adoption permitted. Adoption may either be on a prospective basis or by retrospective
application. If the Abstract is adopted early, in a reporting period that is not the first reporting period in
the entity’s fiscal year, it must be applied retroactively from the beginning of the Company’s fiscal period
of adoption. The Company is currently assessing the future impact of these amendments on its financial
statements and has not yet determined the timing and method of its adoption.

Financial instruMents
During the two most recent years, the Company did not use derivative financial instruments. The
Company’s financial instruments, their fair values, and the financial risks to which the Company is
exposed are disclosed in Note 16 of the Company’s audited consolidated financial statements for the
year ended December 31, 2009.

unauDiteD interiM Financial stateMents
In accordance with National Instrument 51-102 released by the Canadian Securities Administrators,
the Company discloses that its auditors were not requested to review the unaudited interim financial
statements for the period ended March 31, 2010 and 2009.




caution concerning ForwarD-looking stateMents
Certain statements in the Management’s Discussion and Analysis, other than statements of historical fact, are forward-looking in nature and involve various
risks and uncertainties. These can include, without limitation, statements concerning possible or assumed future results of operations of the Company preceded
by, followed by, or that include words and phrases such as “will,” “believes,” “plans,” “intends,” “expects,” “anticipates,” “estimates” or similar expressions.
Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties, and assumptions related to all aspects of the wireless
communications industry and the global economy. As a result, the Company’s actual results may differ materially from those anticipated in the forward-looking
statements and there can be no assurance that such statements will prove to be accurate.
You should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement (and such risks, uncertainties, and other
factors) speak only as of the date on which it was originally made, and GLENTEL expressly disclaims any obligation or undertaking to disseminate any updates or
revisions to any forward-looking statement contained in this document to reflect any change in expectations with regard to those statements or any other change in
events, conditions or circumstances on which any such statement is based, except as required by law. New factors emerge from time to time, and it is not possible for
GLENTEL to predict what factors will arise or when. In addition, GLENTEL cannot assess the impact of each factor on its business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
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