Fitch: Rogers Wireless Remains on Rating Watch Negative.

CHICAGO -- Fitch Ratings is maintaining the Rating Watch Negative status on Rogers Wireless Inc.'s (RWI) 'BBB-' senior secured rating following the announcement that RWI has reached an agreement to make an all cash bid for Microcell Telecommunications Inc. (Microcell). The bid for Microcell would total approximately $1.4 billion, and is subject to the approval of Microcell's shareholders and regulatory approvals. The proposed acquisition of Microcell follows RCI's announcement on Sept. 13, 2004 that it would acquire AT&T Wireless' 48.6 million shares for $1.8 billion. Fitch had placed RWI on Rating Watch Negative following the announcement of the AT&T Wireless transaction.

RWI plans to fund the Microcell transaction through cash on hand, the draw down of its current $700 million credit facility and through a bridge loan of up to $900 million from RCI. As part of the proposed Microcell transaction, RWI and RCI have provided additional clarity with regard to the financing of the AT&T Wireless transaction. As previously disclosed, RCI initially plans to fund the acquisition of AT&T Wireless' shares using a bridge financing facility that would be available for up to two years.

Following the close of both transactions, estimated to be in the fourth quarter of 2004 or in the first quarter of 2005, Fitch anticipates long-term financing for both transactions to be undertaken at RWI, which would significantly increase its leverage. Thereafter, leverage is expected to decline, but the rate at which it will decline will depend on the level of future free cash flows, continued EBITDA growth, and the realization of synergies between RWI's and Microcell's GSM/GPRS/EDGE wireless networks. Fitch intends to meet with RWI and RCI's management early in the fourth quarter, and would follow-up with a resolution to the Rating Watch Negative status. The final rating action would likely lead to a rating downgrade of RWI's debt, with the final level dependent on a review of RWI's operational plans for the next several years.

The operating and financial trends at Rogers Wireless have been strong based on the positive momentum created from the solid operating results over the past two years. Providing additional support to the rating, the Canadian wireless industry, while clearly price-sensitive and competitive, provides a more positive operating environment than in the U.S., particularly with only four players in the Canadian market, compared with at least six operators in the large urban cores within the U.S. Further consolidation resulting from RWI's proposed acquisition of Microcell is expected to provide some degree of additional stability.

Moreover, RWI's credit protection measures strengthened considerably during the past 18 months, with debt-to-EBITDA of 2.5 times (x) at the end of the second quarter 2004, compared with 4.7x in 2002. Fitch expects continued improvement in RWI's credit profile, absent the above events, through growth in free cash flow to approximately C$200 million in 2004. The main drivers for this increase include a stable ARPU supported by growth in data revenues, comparable market share additions of postpaid subscribers, and lower funds required for working capital considerations. RWI maintains a solid liquidity position with C$48 million drawn on a C$700 million revolver as of June 30, 2004. Additionally, RWI does not have any debt maturing until 2006.