MTS Allstream Inc. (MTS Allstream) announced today that it has selected and has started deployment of Zhone’s multi-access line concentrator (MALCTM) to optimize the delivery of next generation voice and new data services over its extensive national network. Zhone’s MALC multi-service access platform (MSAP) will be leveraged to provide diverse and cost effective access on-ramps to MTS Allstream services within Manitoba and across Canada.

“MTS Allstream has had a long relationship with Zhone in our access voice network. We sought a next generation access product to deliver voice and data services to our residential, small business and enterprise customers. Zhone has a comprehensive and flexible converged platform that meets these requirements” said Michael Strople, Vice-President Technology Development for MTS Allstream. “The flexibility, density and the wide range of service interfaces that Zhone supports on one platform were all factors in our decision to go with Zhone. The MALC’s packet voice interface and our national IP core make this technology particularly effective for MTS Allstream.”

“We have been making calculated and strategic strides in Canada which we see as significant, since the Canadian market has been tracking roughly 12 to 18 months ahead of major U.S. players in technology adoption and requirements,” said Mike Scheck, VP of international sales for Zhone. “We see our win as a bellwether of things to come in the broader North American market where carrier grade packet voice is concerned. We are very bullish on the MSAP market opportunity we see globally as well.”

MTS Allstream will be rolling out the new services and evolving existing offerings with the Zhone MALC platform throughout 2008 and over the next several years.

About MTS Allstream

MTS Allstream Inc. is a wholly owned subsidiary of Manitoba Telecom Services Inc., and is one of Canada’s leading national communication solutions providers, delivering innovative products and services through the 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 – IP 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 AAA Alarm Systems Ltd., an affiliate of MTS Allstream which also operates in other western provinces. MTS Allstream’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 TSX: MBT). For more information, please visit: www.mtsallstream.com.

About Zhone Technologies — Access for a Converging World

Zhone Technologies, Inc. (NASDAQ: ZHNE) is a provider of advanced access network equipment to more than 600 operators worldwide. The company offers the industry’s broadest portfolio of fully-integrated access solutions, enabling the full range of multi-play services, including residential and business broadband, VoIP, IPTV, and Ethernet. Zhone’s converged multi-service access platform improves network agility and reduces costs, allowing operators to rapidly deploy premium services on their existing copper and fiber infrastructure while providing a seamless migration path to an efficient, all-IP network. www.zhone.com