Videotron Ltee : Record Cable Subscriber Base in Second Quarter.

MONTREAL--(BUSINESS WIRE)--March 31, 1999--VIDEOTRON(ME:VDO.) (TSE:VDO.) Videotron ltee reports consolidated revenue of $289,851,000 for the first six months ended February 28, 1999, an increase of 8.3 percent compared to $267,698,000 for the similar period last year. Operating income before amortization and depreciation totalled $109,107,000 for the first six months of fiscal 1999, compared to $107,984,000 for the first six months of the previous fiscal year, an increase of 1 percent. This is a noteworthy performance, given the launch of the new services during the first six months which are not yet contributing to the Company's profitability.

Revenue growth is mainly related to the consolidation of the results of CF Cable TV Inc. for six months, compared to four months in the first half of 1998; the acquisition of smaller Quebec-based cable television companies during the fourth quarter of 1998 and the first quarter of 1999; the launch of tiered services in the fall of 1998; as well as the rate increase for tiered services this year. In addition, pay television services and discretionary television services, previously recorded in the results of Le Groupe Videotron ltee, are now grouped under Videotron ltee.

This growth more than offset the decrease resulting from the disposal of cable television operations in Alberta and Ontario in August and November 1998, respectively. Alberta and Ontario operations contributed $13,326,000 and $8,680,000, respectively, to operating results for the first six months of the 1998 fiscal year.

At the end of the first six months of 1999, the Company had 1,546,265 basic service subscribers, including 1,182,862 subscribers who had opted for the extended basic tier, 273,228 for interactive services, and 192,575 for pay television services. As at February 28, 1998, the Company had 1,442,407 basic service subscribers in Quebec. The increase of 104,858 subscribers is attributable to the acquisition of smaller Quebec-based cable television companies, totalling 102,344 subscribers as at February 28, 1999, as well as the Company's success versus the competition.

"We have reached a record of 1 546 000 basic subscribers in Quebec, an increase of 103 858 subscribers compared to the same period last year, explained Guy-R. Beauchamp, Executive Vice-President of Videotron ltee. This growth is largely due to the acquisition of small cable systems in Quebec which accounted for 102 344 subscribers as of February 28, 1999. With new players entering the market, we managed to grow internally by 1 514 subscribers, to maintain our tier penetration over 83 percent and to show an increase of 6 percent in the number of subscribers for discretionary services".

Amortization and depreciation was $58,109,000, a 9.6 percent increase over the first six months of the previous fiscal year. This increase is attributable to network modernization, the consolidation of the results of CF Cable TV Inc., and the acquisition of several smaller Quebec-based cable television companies.

Financial expenses decreased to $25,384,000, compared to $37,042,000 for the similar period of last year. The decrease is attributable to reduced debt resulting from the sale of cable television operations in Alberta and Ontario and from the receipt of investments in other entities within the group, as well as the refinancing, in fiscal 1998, of various debt instruments of the Company.

During the first half of the previous fiscal year, the Company recorded non-recurring charges of $26,861,000 and $18,480,000 comprising the redemption premiums and other items related to the early redemption of Videotron ltee's Senior Subordinated Notes in the amount of US$150,000,000 as well as the redemption of $220,000,000 in Subordinate Notes payable to Groupe Videotron, respectively.

In the second quarter of the previous fiscal year, the Company incurred costs related to the January 1998 ice storm in Quebec and recorded an after-tax extraordinary loss of $8,036,000.

Net income for the first six months of 1999 was $7,697,000 ($3.19 per common share) compared to a net loss after extraordinary items of $31,405,000 ($13.02 per share) for the similar period last year. However, excluding non-recurring charges, the extraordinary loss and related income taxes, net income for the first six months of 1999 would have totalled $14,311,000 ($5.93 per share) compared to $15,031,000 ($6.23 per share) for the similar period last year.

Comparative results for the first six months of 1998 have been restated to reflect the decrease in financial expenses following the revaluation for consolidation purposes of Senior Secured Priority Notes of the CF Cable TV Inc. subsidiary, which had previously reported as totally allocatable to the fourth quarter of 1998. This restatement had a positive impact of $2,429,000 on first quarter results and $4,857,000 on results for the first six months.

Videotron ltee, a subsidiary of Videotron Communications inc., is the second largest cable television company in Canada and the largest in Quebec in terms of number of subscribers. The Company offers a variety of services, including cable television, pay- television, discretionary services, and is also a provider of dial- up and high-speed cable modem Internet access.

Videotron Communications inc. (VCI) is a subsidiary of Le Groupe Videotron ltee, an international communications company. VCI is an integrated communications company bringing together all of Videotron's telecommunications operations in Canada. Its subsidiaries offer services in telephony, telecommunications, cable television, remote surveillance and interactive multimedia development. VCI is a leader in information highway development as a result of its subsidiaries and of its parent company's experience in multimedia development and in integrated telephony and cable television in Canada, the United States and the United Kingdom. -0-

VIDEOTRON LTEE
CONSOLIDATED STATEMENTS OF INCOME

                      For the three-month     For the six-month
                         periods ended          periods ended

(in thousands of
 dollars, except
 for amounts per
 share)
 (Unaudited)      February 28,February 28, February 28,February
                                                            28,
                         1999        1998       1999       1998
----------------------------------------------------------------
                                (restated)            (restated)
Operating revenue
 Cable television   $ 128,092   $ 138,388  $ 261,132  $ 245,998
 Other services        14,306      12,250     28,719     21,700
----------------------------------------------------------------
                      142,398     150,638    289,851    267,698
----------------------------------------------------------------
Direct costs
 Cable television      28,980      31,094     58,075     51,280
 Other services         6,434       3,029     12,986      4,905
----------------------------------------------------------------
                       35,414      34,123     71,061     56,185
----------------------------------------------------------------
                      106,984     116,515    218,790    211,513
================================================================
Operating and
 administrative
 expenses              54,456      59,333    109,683    103,529
----------------------------------------------------------------
Operating income
 before depreciation
 and amortization      52,528      57,182    109,107    107,984
-----------------------------------------------------------------

Depreciation and
 amortization          25,826      29,158     58,109     53,041
Financial expenses     12,549      21,145     25,384     37,042
Net premium, write-off
 of financing charges
 and related expenses
  upon early redemption
  of long-term debt         -      26,861      7,156     26,861
Premium paid upon early
 redemption of
 Subordinated Note
   payable to the parent

   company                  -      18,480          -     18,480
Other items              (200)     (2,538)      (877)    (4,681)
----------------------------------------------------------------
                       38,175      93,106     89,772    130,743
----------------------------------------------------------------
                       14,353     (35,924)    19,335    (22,759)
----------------------------------------------------------------

Income taxes
 Current                   68         (51)      (245)       338
 Deferred               6,313       3,584     12,028        503
---------------------------------------------------------------
                        6,381      (3,635)    11,783        841
---------------------------------------------------------------
                         7972     (32,289)     7,552    (23,600)

Share in the results
 of a company subject
 to significant
 influence                128         120        192        231
Non-controlling
 interest in a
 subsidiary               (47)          -        (47)         -
----------------------------------------------------------------
                           81         120        145        231
----------------------------------------------------------------

Income (loss) before
 extraordinary item   $ 8,053   $ (32,169)   $ 7,697  $ (23,369)
================================================================
Extraordinary item,
 net of income tax
 benefits
  of $4,984,000             -      (8,036)         -     (8,036)
----------------------------------------------------------------

Net income (loss)    $  8,053    $ 40,205    $ 7,697    (31,405)
================================================================

Income (loss) per
 share
 Income (loss) before
  extraordinary item $ 3.34      $(13.33)    $ 3.19      (9,69)
 Net income (loss)   $ 3.34      $(16.66)    $ 3.19     (13.02)
===============================================================

Weighted average number
 of outstanding common
 shares           2,412,427    2,412,427  2,412,427  2,412,427
================================================================