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Four analysts and top management from twenty sector firms examine the investing in Canada sector in this special 129-page Investing in Canada issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info490.htm.

TWST: What criteria do you focus on while making your stock recommendations?

Mr. Rhamey: First and foremost, you have to take a look at the strategic positioning of a company; second, management and their operating track record; third, the balance sheet; and the fourth (this is related to strategy), what type of growth do you think you can drive with that strategy, with that type of management in place, and what is your ability to execute? Those four criteria generally provide you with a good screen on which to assess any company. Then you can get into more of the nuances on the strategy side. What is each company’s exposure to the various segments in the industry. For example, what is each company’s exposure to the growth segments such as data, wireless, and DSL (digital subscriber line deployment)? And then, with respect to the slower growth segments, what is their exposure to traditional local and long distance voice services? When you take a look at that, you’ve got one segment growing in the mid-teens, which is the wireless DSL and data. Arguably they could grow faster than that. And then on the voice side, for the most part, a general parameter would be that voice tends to grow 3% to 5% so that gives you the top-line profile of any given company. And then you take a look at management’s ability to access and exploit those revenues at a time when competition is capturing share. One of the themes that we’re seeing throughout the industry, particularly in the wireline segment, is management’s focus on cost reduction and improving efficiencies — because we’re in a transition period here where revenue growth will be declining. There is increased competition in the market; you’ve got substitution of different services, i.e., you’ve got wireless substituting for wireline services for second lines, you’ve got DSL deployment and cable modem deployment, which replace second lines. So your traditional voice business, which is driven by line growth, is actually starting to show either flat growth on a going-forward basis or in some cases even negative growth. So to offset the prospect that voice will continue to be flat here or deteriorate, you have to cut cost. Over time, you hope that as a percentage of your mix, the growth elements of your revenue line (that being wireless, DSL, data) can drive your revenue growth to the high single digit number.

TWST: What type of guidance are the Canadian telecom companies offering for 2002?

Mr. Rhamey: This is a year of transition, just as 2001 ended up being a year of transition. But the way I would characterize it, the year of transition in 2001 came as a surprise. It was about mid-year that companies began to realize that they weren’t necessarily recording the revenue growth that they had expected, and of course, growth slowed dramatically on the telecom side due to events in September. When I take a look at the companies going forward, very few companies are calling for robust growth in 2002, and their visibility on where they’re going to get growth is lower than in 2001. So a very common theme within the TMT sector is that visibility has been reduced dramatically. That being said, I think within the TMT sector (excluding media), relative to technology, certainly the companies in general may have ratcheted down expectations for 2002 but are able to give a 2002 guidance with some degree of confidence. I understand in the technology sector it’s more of a quarter-by-quarter phenomenon.

TWST: Is there anyone else you would include in the same camp as GT Group (Nasdaq:GTTLB) as a stock that could prove to be promising long term?

Mr. Rhamey: Absolutely. There is TELUS (NYSE:TU), which is an incumbent local exchange carrier in western Canada, expanding on a national basis into eastern Canada, competing against Bell Canada and Aliant Telecom and Manitoba Telecom. Last year they bought a company called Clearnet, which is a national provider of wireless services. The timing of that purchase was unfortunate from their perspective, but nonetheless, they have a very interesting growth platform in place in that if they can execute well in 2002, i.e., report stabilized operations both in their own territory and as they expand outside, in 2003 you could see some very interesting growth numbers coming out of that company as well. We have TELUS with a 27 Canadian target price and a market perform rating.

This special issue includes:

1) Investing in Cananda - In an in-depth (4,700 words) Analyst Interview, Nick Majendie, Director and Senior Vice President of Canaccord Capital Corporation, examines the outlook for the sector and shares specific stock recommendations.

2) Canadian Telecommunications - In an in-depth (3,700 words) Analyst Interview, Peter Rhamey, Managing Director at BMO Nesbitt Burns, Inc., examines the outlook for the sector and shares specific stock recommendations.

3) Canadian Software & IT Services - In an in-depth (4,200 words) Analyst Interview, Paul Bradley, Technology-Software Analyst at Canaccord Capital Corporation, examines the outlook for the sector and shares specific stock recommendations.

4) Canadian Asset Management - In an in-depth (3,800 words) Analyst Interview, Bruce Brewington, Vice President at Putnam Lovell, examines the outlook for the sector and shares specific stock recommendations.

5) CEO interviews (average 2,500 words). Top management of twenty sector firms examine the outlook for their firm and the sector.