MetroNet Overview

MetroNet was founded in 1995 to provide broadband local telecommunications services to business and government customers. MetroNet currently offers local voice and data services in five of Canada's six largest cities. MetroNet's goal is to be the first and leading national facilities-based provider of competitive local telecommunications services to business and government customers in Canada.

The market potential for local telecommunications services is large and growing. In 1996, according to Lemay-Yates, Canada's telecommunications services industry generated approximately $20 billion in revenue, with local and long distance services accounting for approximately $15 billion. From 1991 to 1996, local telecommunications services revenues grew at an average rate of 7.5% to approximately $7.5 billion in 1996. Lemay-Yates estimates that business and government local telecommunications services expenditures accounted for approximately $4.7 billion of this market in 1996.

MetroNet's targeted customer base is primarily medium and select large business and government customers in Canada's eleven largest markets. The Company has initiated service in five of Canada's six largest cities, Toronto, Montreal, Vancouver, Edmonton and Calgary, and has targeted Ottawa-Hull, Quebec City, Winnipeg, Hamilton, London and Kitchener-Waterloo as its next six markets.

MetroNet estimates, based on Lemay-Yates analyses, that business and government local telecommunications services expenditures in the Company's five initial markets represented approximately 45% of the $4.7 billion Canadian business and government local services market in 1996, and together with such expenditures in its six additional markets represented approximately 60% of this market in 1996. MetroNet plans to develop and operate high capacity, high quality fiber optic-based telecommunications networks providing broad market coverage in each of its target markets. MetroNet believes that its early entry into each market will permit it to capture customers looking for an alternative to the ILECs.

MetroNet has installed and intends to utilize its own digital telephone switches to offer local switched services and bundled telecommunications services in four of its five initial markets in the first quarter of 1998 and will utilize its own digital telephone switch in Edmonton when the LC Decisions apply to that market. The Company also intends to offer such local switched services and bundled telecommunications services utilizing its own digital switches and fiber optic telecommunications networks in its six additional markets by the end of the first quarter of 1999.

MetroNet is pursuing a strategy of signing up customers as soon as practicable. The importance of early market entry is reflected in a report prepared by the Yankee Group which shows that approximately 8% of business customers would be prepared to try an alternative local service provider for at least part of their services with no price discount incentive, and up to 35% of business customers would be prepared to do so if a discount of 15% is offered, assuming that service intervals and quality are equal to that offered by the ILEC.

MetroNet intends to be the first national competitive local exchange carrier (''CLEC'') in Canada and to be one of the first alternative providers of local telecommunications services in each of the markets it enters. MetroNet is building a highly motivated and experienced direct sales organization which has expanded from six people in January 1997 to 53 people in November 1997.

The Company's planned network architecture is based on a blend of successful strategies adopted by U.S. CLECs. MetroNet has gained this insight from a number of sources, including the experience of Tom Gillett, the Company's Senior Vice-President, Business Development and one of the founders of Brooks Fiber Properties Inc. (''Brooks''), a leading U.S. CLEC, and the consulting services of GLA International, Inc. (''GLA''), a wholly-owned subsidiary of Brooks, which is assisting the Company to design, engineer and construct its networks.

The Company has selected Northern Telecom Limited (''Nortel'') and FORE Systems Inc. (''FORE Systems'') to provide it telecommunications equipment and to assist in designing its networks due to their recognized expertise in the telecommunications industry. MetroNet believes that utilizing the experience of U.S. CLECs and the expertise of its vendors has assisted the Company in selecting the most appropriate technology, in efficiently designing, engineering and constructing its networks, and in avoiding unnecessary time delays and costs associated with obtaining rights-of-way.

MetroNet believes that a critical factor in the successful implementation of its strategy is the quality of its management team and their extensive experience in the telecommunications industry. The Company has built a skilled and experienced management team in order to challenge the dominance of the ILECs in the local telecommunications services market. The senior management team has, on average, 13 years of industry experience with Canadian and/or U.S. telecommunications companies. Most of MetroNet's senior managers have held key executive and operating roles in start-up or well-established telecommunications companies in Canada or the United States.

MetroNet prides itself in offering value through exceptional customer service. With simple and flexible billing options, highly trained technicians and the latest in service support systems, MetroNet offers telecommunications with a superior level of service and commitment to customers.