NewsRelease by tyndale


     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.

                        MTS Reports Solid Second Quarter Results
                            With 15.4% Gain in Growth Services Revenues

Second Quarter Highlights
• Total revenues from continuing operations up by 2.6% year-over-year
• Revenues from growth services up by 15.4%; now represent 44.2% of total revenues
• Enterprise Solutions division delivered revenue growth of 3.2%
• Strong growth of 10.6% in wireless subscribers
• EPS from continuing operations up by 2.5% in the second quarter or 7.1% year to date
• EBITDA from continuing operations up by 0.5% in the second quarter or 1.3% year to date
• Declared dividend of $0.65 per share

WINNIPEG, Manitoba, August 11, 2008 – Manitoba Telecom Services Inc. (“MTS” or
the “Company”) (TSX: MBT) today announced its results for the second quarter ended
June 30, 2008. Total revenues from continuing operations1 increased by 2.6% and 2.5% for the
three and six months ended June 30, 2008 to reach $486.4 million and $965.2 million,
respectively. EPS2 from continuing operations for the quarter increased by 2.5% to $0.81, and
EBITDA3 from continuing operations increased by 0.5% to $171.3 million, as compared to the
previous year. On a year to date basis, EPS from continuing operations increased by 7.1% to
$1.65, and EBITDA from continuing operations increased by 1.3% to $340.0 million.

“MTS continued to deliver profitable growth during the second quarter,” said Pierre Blouin,
Chief Executive Officer. “These results were driven primarily by double-digit growth in growth
services and the continued strong performance of both our Consumer Markets division and the
Enterprise Solutions division, which delivered its third consecutive quarter of overall revenue

Mr. Blouin continued, “We are well-positioned to achieve our growth targets for 2008, while
continuing to provide an attractive dividend yield to our shareholders.”

The Company has continued to reduce its cost structure and achieved efficiencies in its
operations and reported annualized cost reductions of $20.1 million following the second quarter
already reaching its 2008 cost reduction target of $20 million to $30 million of annualized

Double-digit growth in revenues from the Company’s growth services portfolio, which includes
wireless, converged Internet protocol (“IP”), unified communications, digital television and
high-speed Internet services, strongly contributed to the gains posted by its continuing operations
metrics in the three and six months ended June 30, 2008. With revenues from growth services
increasing by 15.4% to $214.9 million in the second quarter, and by 16.6% to $419.8 million in
the first six months of the year, MTS is continuing to successfully increase its revenues
from growth services while profitably transitioning its customers to growth services products.
For the second quarter and year to date in 2007, respectively, growth services revenues
contributed 44.2% and 43.5%, well ahead of the 39.3% and 38.2% contributions made to
revenues from continuing operations in the comparable year-ago periods.


                                                 three months                                six months
         in millions of dollars,
                                                ended June 30               %              ended June 30               %
       except per share amounts                                           change                                     change
                                                2008         2007                          2008         2007
Continuing Operations
   EPS                                             0.81        0.79         2.5               1.65        1.54         7.1
   EBITDA                                         171.3       170.5         0.5              340.0       335.5         1.3
   Free cash flow4                                 72.4        88.6       (18.3)             151.1       183.1       (17.5)
   Growth services revenues                       214.9       186.2        15.4              419.8       360.1        16.6
   Legacy services revenues                       271.5       287.9        (5.7)             545.4       581.4        (6.2)
   Revenues                                       486.4       474.1         2.6              965.2       941.5         2.5
   Basic EPS                                       0.59        0.88       (33.0)              1.43        1.68        (14.9)
   EBITDA                                         161.0       172.2        (6.5)             329.7       342.4         (3.7)
   Free cash flow                                  54.6        89.9       (39.3)             129.4       193.3        (33.1)
   Revenues                                       486.4       474.1         2.6              965.2       940.7          2.6
MTS provides financial information on continuing operations in order to assist investors in understanding its underlying financial
performance. MTS’s definition of continuing operations excludes certain non-recurring items such as restructuring costs and the
retroactive impact of regulatory decisions.

Improved EBITDA, lower debt charges, higher other income and fewer shares outstanding all
contributed to the increase in EPS from continuing operations during the quarter. The 0.5%
increase in EBITDA from continuing operations for the second quarter reflects the increase in
growth services revenues and the positive impact of cost reduction initiatives. Free cash flow
from continuing operations was $72.4 million and $151.1 million in the three and six months
ended June 30, 2008, as compared to $88.6 million and $183.1 million in the same periods in
2007, respectively. The change in cash flow year-over-year is due primarily to the timing of
certain capital expenditures and pension funding payments. The Company is on track to meet its
cash flow guidance for the year.

“Double-digit gains for growth services combined with our continued success in achieving our
cost reduction targets and stabilizing legacy services revenues were the key performance drivers
for the quarter,” said Wayne Demkey, Chief Financial Officer. “We expect that, by continuing
to execute our business plan, we will continue to grow revenues and profitability throughout the
rest of the year.”

The MTS Board of Directors declared a cash dividend of $0.65 per share for the third quarter of
2008, which is payable on October 15, 2008 to shareholders of record on September 15, 2008.


Enterprise Solutions division
The Company’s Enterprise Solutions division once again delivered solid results and margins in
the second quarter of 2008, achieving sequential and year-over-year quarterly growth in revenues
and EBITDA. Next generation data revenues, which include converged IP and unified
communications services, continued their strong performance, increasing by 20.7% and 23.7%
over the second quarter and first six months of 2007, while the Company’s IP-virtual private
network customer count increased by 33.0% to 282, reflecting the continued strong demand for
innovative next generation IP-based services offered by MTS Allstream Inc. (“MTS Allstream”)
to its business customers.

The Enterprise Solutions division’s national sales team continued to win new accounts into the
second quarter of 2008. The division acquired new contracts valued at $80.6 million in the
second quarter, and $156.4 million year to date. The division signed major contracts in the
quarter with The City of Winnipeg, BMO Financial Group, DHL Express, BC Housing,
Manitoba Hydro and The Alberta Teachers’ Association.

Consumer Markets division
The Company’s Consumer Markets division has been awarded the prestigious 2008 Frost and
Sullivan Competitive Strategy Leadership Award in the North American Consumer
Communication and Entertainment Wallet Share Growth category. This award is presented to a
company whose competitive strategy has yielded significant gains in market share or has
executed an innovative strategy during the research period. The Consumer Markets division has
consistently outperformed its peers operationally and financially and the Company is proud to be
recognized with this significant award.

Successful second quarter performance by the Company’s Consumer Markets division is
attributable to the continued strong performance by its growth services and the division’s ability
to bundle multiple popular products and services for customers. Delivering best in class
performance, this division holds the number one position for all telecommunications markets in
Manitoba with the full suite of next generation wireless, high-speed Internet, data, digital
television and wireline voice services that it offers customers. Digital television and high-speed
Internet services again delivered double-digit growth in subscribers and revenues when
compared to the same period last year. Wireless customers grew at the fastest pace in Canada,
growing 10.6%, with wireless services revenues increasing by 6.0% in the quarter and 8.4% year
to date.

Additionally, wireless penetration in Manitoba is approximately 50% as compared to the
Canadian penetration rate at the end of 2007 of approximately 62%. These penetration rates
create the right conditions for continuing strong growth in the Company’s subscriber base, as
consumer adoption of wireless products continues to expand.

Another strong performance was in high-speed Internet where customers increased by 9.0%,
while the associated Internet services revenues grew by 21.4% in both the quarter and first six
months of the year as compared to the same periods in 2007.

Digital television customers increased by 13.2%, with revenues increasing by 20.2% and 21.7%
for the second quarter and first six months, respectively, as compared to 2007. With over
80,300 customers, the Company’s market share is 32%. MTS’s strategy of bundling services
continued to engender customer loyalty, as demonstrated by the modest and decelerating rate of
decline of residential access line losses, which is in line with that of recent quarters.


Following the conclusion of the advanced wireless services spectrum auction on July 21, 2008,
MTS strengthened its existing wireless business by acquiring 35 MHz of wireless spectrum,
covering 1.2 million people in Manitoba, at an auction price of approximately $41 million. This
provides the Company with the flexibility and capacity to manage future demand for next
generation wireless services, including bandwidth-intensive data applications. The Company
expects to fund these future improvements, when required by customer demand, through its
existing capital expenditure program.

The Company is also transitioning certain wireless service requirements away from Bell
Mobility to new suppliers and to its own platform. A more detailed description of this transition
and related costs is contained in MTS’s second quarter 2008 Management’s Discussion and
Analysis (“MD&A”) filed on SEDAR and the Company’s Web site.


The Company successfully renegotiated collective agreements with its five unions:
Telecommunications Employees Association of Manitoba - International Federation of
Professional and Technical Engineers, Local 161 (“TEAM-IFPTE”); the International
Brotherhood of Electrical Workers, Local 435 (“IBEW”); the Communications, Energy and
Paperworkers Union of Canada, Local 7 (“CEP”); the Canadian Auto Workers, Local 2000
(“CAW”); and the United Steelworkers, TC Local 1976 (“USW”). The new collective
agreements have expiry dates ranging from April 2009 to January 2011, and provide the
Company with flexibility to enhance its ability to remain competitive in its markets.


As announced on December 7, 2007, the Company’s 2008 outlook for continuing operations is
as follows:

                      2008 Financial Outlook – Continuing Operations
                Revenues                             $1.920 B to $1.980 B
                EBITDA                               $660 M to $680 M
                EPS                                  $2.95 to $3.15
                Free cash flow                       $250 M to $280 M
                Capital expenditures                 14% to 15% of revenues

For assumptions underlying the Company’s 2008 outlook, refer to “Material Assumptions” in the
Company’s release dated December 31, 2007 and its second quarter 2008 MD&A, which are
filed on SEDAR and the Company’s Web site.


The following are various announcements made by the Company’s major operating subsidiary,
MTS Allstream during the second quarter.

Enterprise Solutions division announcements

   •   On June 16, 2008, MTS Allstream announced that it had won the 2008 Microsoft Partner
       of the Year award for information worker solutions, unified communications. From a
       pool of more than 2,000 entrants worldwide, Microsoft recognized MTS Allstream’s
       exceptional offering of breakthrough Microsoft Office system-based communications
   •   On June 2, 2008, MTS Allstream announced that it had become a certified qualified
       security assessor by the Payment Card Industry Security Standards Council. As a
       qualified security assessor, MTS Allstream is certified to help its customers adhere to
       payment card industry compliance standards and better address overall security and
       networking needs.
   •   On May 8, 2008, MTS Allstream announced that it had won the Cisco Partner Summit
       regional Market Mover Award (Canada). This award recognizes MTS Allstream’s
       performance and success as a Cisco channel partner in Canada during 2007.

Consumer Markets division announcements

   •   On July 17, 2008, MTS Allstream announced that it will continue to expand its wireless
       network coverage by investing over $1.2 million to add new cellular sites to rural
       communities in Manitoba by the end of 2008. This investment will expand coverage for
       over 14,000 people in northern Manitoba.
   •   On July 9, 2008, MTS Allstream announced the opening of two new MTS Connect™
       stores. These stores provide a one-stop-shop featuring a new format, digital media
       displays as well as a demonstration bar where consumers can test products and services,
       and their interconnectivity, before they make a purchase.
   •   On June 12, 2008, MTS Allstream announced that it was collaborating with the Winnipeg
       School Division and Dell Canada in the Dell TechKnow program. The Dell TechKnow
       program is a 40-hour after-school program, which provides underserved middle school
       students with an opportunity to acquire computer skills while promoting self-esteem,
       academic success and preparation for opportunities in today's digital world.
   •   On May 29, 2008, MTS Allstream announced the availability of the Blackberry®
       Curve™ 8330, a sleek and stylish high-speed smartphone that offers a powerful
       combination of communications and multimedia capabilities.
   •   On May 28, 2008, MTS Allstream announced the re-launch of the Entourage Web site,
       an exclusive VIP club for youth, which offers free tickets and access to the most popular
       concerts at the MTS Centre and sold-out events across Manitoba.

Corporate announcements

   •   On July 4, 2008, MTS Allstream announced that it will continue to support community
       festivals across Manitoba in 2008 by providing more than $240,000 in support to a
       variety of festivals throughout the province.

    •    On June 25, 2008, MTS Allstream announced a 10-year sponsorship agreement with
         Exhibition Place in Toronto for the naming rights of its new conference centre. The
         state-of-the-art conference centre, which opens in the summer of 2009, will be named
         Allstream Centre – A Conference & Convention Centre at Exhibition Place.
    •    On May 23, 2008, MTS Allstream announced that it will be awarded with the
         2008 Special Recognition Award from Canada’s Telecommunications Hall of Fame in
         October of this year. The Special Recognition Award is awarded to a technology,
         location, event, organization, or group of individuals or organizations that have
         contributed significantly to Canada’s telecommunications industry.
    •    On April 7, 2008, MTS Allstream announced that MTS had been recognized as one of
         Canada’s top socially responsible corporate citizens and that it remained a constituent of
         the acclaimed Jantzi Social Index®. The Jantzi Social Index, developed by Janzti
         Research Inc., consists of 60 Canadian companies that pass a set of broadly-based
         environmental, social and governance screens.

Quarterly Conference Call
MTS’s second quarter 2008 conference call with the investment community is scheduled for
4:00 p.m. (Eastern time) on August 11, 2008. Investors are invited to listen to the conference
call. The dial-in number is 1-800-732-9307. A live audio Webcast of the investor conference
call can be accessed by visiting the Investors section of the MTS Web site
( A replay of the conference call will be available until
midnight (Eastern time) on August 21, 2008, and can be accessed by dialing 1-877-289-8525 or
1-416-640-1917 (access code 21276282#).

MTS’s interim MD&A for the six months ended June 30, 2008 and supplementary financial
information are available in the Investors section of the MTS Web site at

About Manitoba Telecom Services Inc.
Manitoba Telecom Services Inc., through its wholly owned subsidiary MTS Allstream Inc., is one of Canada’s
leading national communication solutions providers, delivering innovative products and services through its
Enterprise Solutions and Consumer Markets divisions. The Enterprise Solutions division, which operates under the
Allstream brand nationally and under the MTS Allstream brand in Manitoba, is a leading competitor in the national
business and wholesale markets. This division offers customers a portfolio of solutions tailored to the needs of
medium and large businesses looking for success in a world of rapidly evolving technology – Internet protocol
connectivity, unified communications, IT consulting and security services, and voice and data connectivity services.
The Consumer Markets division leads every telecommunications market segment in Manitoba, delivering a full suite
of next generation wireless, high-speed Internet and data, digital television and wireline voice services under the
MTS brand, as well as small business services in select markets across Canada under the Allstream brand, and
security and alarm monitoring services through the company’s subsidiary AAA Alarm Systems Ltd., which also
operates in other western provinces. The company’s extensive national broadband fibre optic network spans more
than 24,300 kilometres, and provides international connections through strategic alliances and interconnection
agreements with other international service providers. Manitoba Telecom Services Inc.’s common shares are listed
on The Toronto Stock Exchange (trading symbol: MBT). For more information, please visit:

Forward-Looking Statements Disclaimer
This news release includes forward-looking statements and information (collectively, the “statements”) about our
corporate direction, business opportunities, operating and dispute resolution activities, financial objectives, and
future financial results and performance 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 August 11, 2008. Examples of statements that
constitute forward-looking information may be identified by words such as “believe”, “expect”, “project”,

    “anticipate”, “could”, “target”, “forecast”, “intend”, “plan”, “outlook”, “pending”, and other similar terms. Factors
    that could cause anticipated opportunities and actual results to differ materially from those expected, and the
    material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection set out
    in such forward-looking statements, include, but are not limited to, the items identified in our interim MD&As for
    the first and second quarters of 2008, and our 2007 annual MD&A. 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.

    Factors that could cause actual results to differ materially include, but are not limited to, the intensity of competitive
    activity from both traditional and new competitors (competitive conditions); the ability to retain major customers
    (customer relationships); decisions by the federal regulator that affect our ability to compete effectively or to enter
    into new business opportunities (developments in federal regulation); general economic and market conditions and
    the level of consumer confidence and spending, and the demand for, and prices of, our products and services
    (market conditions and economic fluctuations); the ability to manage labour relations effectively (collective
    agreements); the ability to anticipate, and respond to, changes in technology (technology); and other risk factors
    listed from time to time in our comprehensive public disclosure documents, including our 2007 Annual Report and
    in other filings with the Canadian securities regulatory authorities. Unless otherwise stated, all amounts are
    expressed in Canadian dollars. For further information, refer to the “Risks and Uncertainties” sections in our
    2007 annual MD&A and our interim MD&As for the first and second quarters of 2008.

    Additional information relating to our Company, including our Annual Information Form, is available on SEDAR at This news release and the financial information contained herein have been reviewed by our
    Audit Committee and approved by our Board of Directors.


    Investor contact:           Ian Chadsey
                                Vice-President Investor Relations
                                (204) 941-8283

    Media contact:              Greg Burch
                                Manager Corporate Communications
                                (416) 345-3576 or
                                (204) 941-8576

  Refer to MTS’s second quarter 2008 interim MD&A for the definition of continuing operations.
  EPS is earnings per share.
  EBITDA is earnings before interest, taxes, amortization, other income and discontinued operations. EBITDA should not be
construed as an alternative to operating income or to cash flows from operating activities (as determined in accordance with Canadian
generally accepted accounting principles) as a measure of liquidity.
  Refer to MTS’s second quarter 2008 interim MD&A for the definition of free cash flow.


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