3/12/08 - Manitoba Telecom Services Inc., the Canada Pension Plan Investment Board and The Blackstone Group L.P. announced that they have formed a consortium to make a deposit and submit an application to bid as a new entrant in the upcoming Advanced Wireless Services ("AWS") spectrum auction. The consortium made a $340 million deposit in the form of letters of credit to Industry Canada.

The auction, which is scheduled to begin on May 27, 2008, is being conducted by Industry Canada. One of the objectives of the auction is to foster greater competition and innovation in the Canadian wireless market.

As contemplated, MTS Allstream, CPPIB and Blackstone will each own approximately one-third of the new entity. Ownership and governance of the new entity will comply with Canadian ownership and control rules for the telecommunications sector and the AWS auction rules.

It is contemplated that if the consortium is successful in acquiring spectrum licenses, André Tremblay and a team of veteran managers with deep expertise in the wireless telecom industry will manage the new wireless company. Mr. Tremblay was previously the founding CEO of Microcell, operator of the Fido brand wireless service. He and his team have extensive experience launching a competitive new entrant in the Canadian wireless market.

Pierre Blouin, Chief Executive Officer, MTS Allstream, said, "We are moving towards the auction with exceptionally strong partners, a clear and disciplined strategy, and a focus on creating long term value for our shareholders. By participating in this group with a minority interest, MTS is well-positioned to capitalize on this opportunity and maintain its current dividend policy."

"A strong new entrant has the potential to bring much-needed innovation to Canada's wireless telecom sector." Mr. Blouin added, "If our group is successful, we will have created the opportunity for our Allstream Enterprise division to offer very rich wireless voice and data products to its large business customers across Canada through a preferred wholesale arrangement and without affecting our successful wireless business in Manitoba."

The parties to the consortium do not intend to provide further comment regarding their plans or strategies until such time as they have finalized their discussions and executed definitive agreements.

Goldman, Sachs & Co. and CIBC World Markets Inc. are advising MTS Allstream on the formation of the Consortium. Torys LLP and Aikins, MacAulay & Thorvaldson LLP are legal advisors to MTS.

Keywords: canada pension plan, manitoba telecom services, mts allstream, spectrum auction, blackstone group, cppib, spectrum licenses, auction rules, telecommunications sector, industry canada, aws auction, investment board, letters of credit, Wireless Security