Allstream Inc. Declares Special Dividend TORONTO, Dec. 9 /PRNewswire-FirstCall/ -- Allstream Inc. (TSX: ALR.A, ALR.B; NASDAQ: ALLSA, ALLSB), a leading communication solutions provider with a world-class portfolio of Connectivity, Infrastructure Management and IT Services, today announced that its Board of Directors has declared a special dividend of $3.50 Canadian per share on the issued and outstanding Class A Voting Shares and Class B Limited Voting Shares. This special dividend is payable on January 6, 2004 to holders of record at the close of business on December 19, 2003. "This decision demonstrates the strength of our liquidity position and the confidence in our business," said John McLennan, Vice Chairman and Chief Executive Officer, Allstream. "We have generated strong cash flow since we emerged from restructuring in April, and we want our shareholders to participate in that success. We are confident we have the appropriate resources to operate our business and take advantage of new opportunities." "Allstream will continue to have strong liquidity and the appropriate financial flexibility after this C$70 million special dividend payment," said David Lazzarato, Executive Vice President and Chief Financial Officer, Allstream. "We believe this special dividend is the best way to provide a meaningful cash return to all our shareholders, while at the same time, preserving sufficient liquidity to enable the Company to maintain operating flexibility and customer confidence." About Allstream Allstream is a leading communication solutions provider with a world- class portfolio of Connectivity, Infrastructure Management and IT Services. Allstream collaborates with customers to create tailored business solutions that meet their unique needs and help them compete more effectively. Spanning more than 18,800 kilometres, Allstream has an extensive broadband fibre-optic network and the greatest reach of any competitive carrier in Canada, and provides international connections through strategic partnerships and interconnection agreements with other international service providers. Allstream has approximately 4,000 employees and is a public company with its stock traded on the Toronto Stock Exchange under the symbols ALR.A and ALR.B, and on the NASDAQ National Market System under the symbols ALLSA and ALLSB. Visit Allstream's website, http://www.allstream.com/ for more information about the company. Note to Investors This news release includes statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements provisions contained in the United States Private Securities Litigation Reform Act of 1995. The Company cautions that actual performance will be affected by a number of factors, many of which are beyond the Company's control, and that future events and results may vary substantially from what the Company currently foresees. Discussion of the various factors that may affect future results is contained on page 1 of the Company's Annual Information Form dated May 2, 2003, which is filed with the Securities and Exchange Commission, the Ontario Securities Commission, and SEDAR. DATASOURCE: Allstream Inc. CONTACT: Media: May Chong, (416) 345-2342, ; Investors and Analysts: Brock Robertson, (416) 345-3125, ; Dan Coombes, (416) 345-2326,

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