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B u i l d i n g M o m e n t u m

Q2 2007

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Safe-Harbour Notice

This presentation contains certain forward-looking information. Material factors or assumptions were applied in drawing conclusions or making a forecast or projection reflected in such forward information. Actual results may differ materially from a conclusion, forecast or projection in such forward-looking information. Additional

information about such material factors and assumptions can be found in MTS’s filings with the Canadian securities commissions. MTS disclaims any intention or obligation to

update or revise any forward looking statements, whether as a result of new information, future events or otherwise.

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SeattleSeattle

VancouverVancouver

VictoriaVictoriaRichmondRichmond

SpokaneSpokane

DetroitDetroit

WinnipegWinnipeg

ChicagoChicago

BuffaloBuffalo

New YorkNew York

ChamplainChamplain

EdmontonEdmonton

CalgaryCalgary

KamloopsKamloops

BurnabyBurnaby

Thunder BayThunder Bay

SaskatoonSaskatoon

ReginaRegina

LondonLondon

SudburySudbury

HamiltonHamilton TorontoToronto

QuebecQuebec

HullHullOttawaOttawa

HalifaxHalifax

St. John’sSt. John’s

MontrealMontreal

Fort McMurrayFort McMurray

National IP Network Footprint

Deep Customer Relationships

National IP Network Footprint

Deep Customer Relationships

Consumer Markets Division#1 in all telecom markets

in Manitoba

Enterprise Solutions Division# 1 Competitor to Bell and Telus

in national business markets

$1.9 billionRevenues in 2006

$286 millionFree cash flow in 2006

Building Momentum from a Leadership Position

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• One of highest dividend yields on TSX - $2.60 per common share• Committed to 70%-80% payout ratio of annual distributable cash flow• Returning proceeds of sale of non-core assets to shareholders via

$320M share repurchase plan

Combined with Annual Dividend, Return to Shareholders Equivalent to $7.20/share

2006 Returns (1)

21.6%18.5%

14.5%17.3%

Telus S&P/TSX BCE MTS

Top 5 Yields on TSX (2)

5.3%6.2%

5.4% 5.5%

BiovailCorp.

Rothmans Inc.

RusselMetalsMTSNorbord

4.5%

(1) Includes price appreciation & dividends

Creating Long Term Shareholder Value

(2) As at May 15, 2007

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Stronger, Focused, More Competitive

Leveraging Our Core Strengths

NationalIP NetworkFootprint

NationalIP NetworkFootprint

InnovationInnovation

Deep Customer

Relationships

Deep Customer

Relationships

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Building Momentum

2 0 0 62 0 0 62 0 0 72 0 0 7

Solid Growth Foundation

Building Momentum

• 4 consecutive quarters of solid performance

• Strengthened balance sheet

• Increased free cash flow by 18%

• Achieved two year cost reduction target of $100 m in one year

• Monetized non-core assets for $320M

• Double digit increases in growth services

• Revitalized Enterprise Solutions Division

• NAS declines down 65%*

from Q3 to Q4

• Winbacks on the rise

• Continued double digit increases in growth services

• $40 - $50M in cost savings beyond $120M from 2006 initiatives

• Bundling strategy gaining traction in Manitoba

• First YOY growth at Enterprise Solutions since 2001 (ex. Rogers/AT&T)

• New mid-market enterprise initiative

• Continued leadership in technological innovation

• Continued engagement inregulatory process

*After adjusting for temporary seasonal disconnects

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29% 36% 40%+

2 0 0 5 2 0 0 6 2 0 0 7 E

Growth Services > 40% of Revenue and EBITDA by YE 2007

Legacy Growth

Legacy to Growth Services

Driving the Transition

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Converged IP Revenue

Unified Communications Revenue

> Gaining Traction in the Marketplace in 2007

ENTERPRISE DIVISION

25% - 30%

45% - 50%

Double Digit Increases in Growth Revenues

Wireless Customers

CONSUMER DIVISION

9% - 12%

High Speed Internet

Digital TV Revenue 35% - 40%

12% - 15%

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Cost Reductions

Improving Operational Efficiency

• On track to achieve approximately $120M in cost reductions from 2006 initiatives

• PLUS an additional$40M - $50M in 2007

• Q1 07 update on cost reductions: $131M

$109~ $20M

YE 2006Actual

2007Target

Exceeded Our Two Year Cost Reduction Target of $100M in One Year

Millions

$40M to $50M

$160-170

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Revenue Growth

• Year-over-year revenue growth expected in 2007*

• Improving margins through increased use of co-location & IP access services

*Excluding Rogers and AT&T

2006-2009 5% CAGR*

2007E 2008E 2009E

$M

> Revitalized & Focused

Enterprise Solutions DivisionStrengthening Business Fundamentals

IP-VPN Customer Count

Q1 06 Q2 06 Q3 06 Q4 06 Q1 07

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• Growing demand for IP-based solutions in the business market“Mindshift” Roadshow w/Mitel confirmed customers are ready for IP

• In first quarter 2007 we generated $76 million of new contracts• MTS Allstream is the first to market Cable Voice services on a national basis

Significant opportunity for growthAccess Communications and Persona Communications in Q4 2006

Customer Wins/Renewals

Enterprise Solutions DivisionGaining Traction in the Market

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Network Coverage & Capabilities

Network Coverage & Capabilities

New product developmentNew product development

Improving customer experience and interactions

Improving customer experience and interactions

Market based offers/Rational re-pricing

Market based offers/Rational re-pricing

Acquire

Upsell

Retain

Winback

58%*Bundled CustomerGrowth: 2%*Bundled Customer

ARPU:

* Year end 2006 results

Consumer Markets DivisionMeeting the Challenge of Local Competition

> Engaging Customers in Multiple-Service Relationships

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Q1 06 Q2 06 Q3 06 Q1 06 Q2 06 Q3 06

Number of Customers with Multiple Product Bundles

Slowing Declines in Residential Network Access Services *

Continued Growth in Wireless, Internet & Digital TV

*After adjusting for temporary seasonal disconnects

Consumer Markets DivisionMeeting the Challenge of Local Competition

Q4 06 Q1 07 Q4 06 Q1 07

“...80% of winbacks take 2 additional growth products.”

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Opportunities for Growth

Mid-National Market Strategy

• 10,000 customer target group

National Small Business Market

• 300,000 customer target group

Wireless Spectrum Auction

• Including set aside, roaming & tower sharing

• Opportunity to expand wireless nationally

• Target markets: data, business & retail wireless, markets

Focusing on Markets where We Can Compete and Be Profitable

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• Broad competition requires open competitor access to public networks owned/controlled by incumbents

• Quality of Service and Essential Facilities Regimes are key regulatory drivers towards competitive market forces yielding improved customer experience, choice and innovation

• A price cap regime that recognizes the different states of competition within residential and business markets

Momentum Towards Competitive Market Forces

• Federal Government Policy Direction• CRTC Essential Facilities Proceeding

• Clarified Forbearance Framework

Positive Momentum on Competitor Access & Local Forbearance

Competitor Network Access Will Drive Robust Competition, Faster Innovation and Reduced Telco Costs

Actively Engaged in the Regulatory Process

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B u i l d i n g M o m e n t u m

Financial Update

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Delivering Results in 2006

Revenues

(in millions of dollars except per share amounts)

$1,935

Guidance vs. Actual Results*

$1,885

Met or Exceeded Guidance in 4 Key Metrics

EBITDA$655$630

Basic EPS

$2.40$2.10

Free Cash Flow$285$260

G U I D A N C E

G U I D A N C E

G U I D A N C E

G U I D A N C E

$1,917

$650

$2.50

$286

*From continuing operations

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Q1 Results

EPS

EBITDA

Free Cash Flow

Q1 2007 % change

0.74

(in millions $, except per share amounts)

165.0

91.6

0.63

163.2

86.9

Debt to Capitalization

Continuing Operations

467.4

37.1%

480.4

Legacy Services Revenues

Revenues

Growth Services Revenues 173.9 158.5

293.5 321.9

17.5%

1.1%

5.4%

9.7%

(8.8)%

(2.7)%

Q1 2006

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Strong and Sustainable Dividend

• Free cash flow exceeds cash requirements leading to a growing surplus

• Capital expenditures14% to 15% of revenues

• New federal pension solvency regulations reduces future funding

2006 → over funded (reduces 2007 requirement)2007 → Approx. $4 million solvency paymentsGoing forward → Recent valuation reduces funding to $20-25 million from $40-45 million annually

Free Cash Flow Surplus is Growing

2007E 2008E 2009E

Dividend Pension Deficit Funding

Transition & Workforce Reduction

Capex

Free Cash Flow before Capex

Dividend is Fully Supported by Free Cash Flow

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Maximizing the Value of Our Tax Assets

Cash Taxes Not Required Before 2014

Book Value Fixed Assets

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

$M UCC & ECE Allstream Losses New Tax Loss Carryforwards*

* New tax loss carryforwards are largely due to large CCA claims made in 2009 & 2010

• No payment of cash taxes expectedSubstantial loss carryforwards reduce taxable income to zero

Allstream Losses utilized at May 2009

Taxable no earlier than 2014

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Revenues $1.875 B to $1.925 B

EBITDA $625 M to $655 M

Capital Expenditures 14% to 15% of Revenues

EPS $2.30 to $2.50

Free Cash Flow $240 M to $270 M

Continuing Operations

2007 Financial Outlook

Revenues excluding Rogers AT&T up 2% - 4%

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Returning Value to Shareholders

1999 2007E2000 2001 2002 2003 2004 2005 20061998

$M

• Dividend yield 5.3%* - one of the highest on the TSX• $320 M Share buyback – half complete since Dec. ’06

*As at May 15, 2007

0

200

400

600

800

1,000

0%

10%

20%

30%

40%

50%

Dividends Share Buy Backs Debt to Capital %

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Share Performance if You Invested $100

$115$100 $113 $149 $160 $140 $122 $155 $178 $221 $259

$129$100 $166 $186 $340 $313 $329 $418 $484 $422 $513

Dec31/97

Jan 6/97

Dec31/98

Dec31/99

Dec31/00

Dec31/01

Dec31/02

Dec31/03

Dec31/04

Dec31/05

Dec31/06

MTS S&P/TSX Comp.

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Building MomentumStronger, Focused & More Competitive

Delivering Long-term Shareholder Value

• Sharpened Strategic Focus

• Improved Cost Structure

• Accelerating Growth from Growth Services

• Continuing Leadership in Technological Innovation

• Deep Customer Relationships, Solid Foundation for Growth

• New Growth Initiatives

• Strong & Sustainable Dividend• Active Regulatory Engagement