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Rogers Wireless Communications Inc.

2003 MANAGEMENT’S DISCUSSION AND ANALYSIS

     This discussion should be read in conjunction with the audited
Consolidated Financial Statements and Notes thereto for 2003. The financial
information presented herein has been prepared on the basis of Canadian
generally accepted accounting principles (“GAAP”). Please refer to Note 18 to
the Consolidated Financial Statements for a summary of differences between
Canadian and United States (“U.S.”) GAAP.

     Throughout this discussion, percentage changes are calculated using
numbers rounded to the decimal to which they appear. All dollar amounts are in
Canadian dollars unless otherwise indicated.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

     This Management’s Discussion and Analysis includes forward-looking
statements concerning the future performance of the business of Rogers Wireless
Communications Inc. (“Rogers Wireless” or the “Company”), its operations and
its financial performance and condition. When used in this Management’s
Discussion and Analysis, the words “believe”, “anticipate”, “intend”,
“estimate”, “expect”, “project” and similar expressions are intended to
identify forward-looking statements, although not all forward-looking
statements contain such words. These forward-looking statements are based on
current expectations. The Company cautions that all forward-looking information
is inherently uncertain and actual results may differ materially from the
assumptions, estimates or expectations reflected or contained in the
forward-looking information, and that actual future performance will be
affected by a number of factors, including economic conditions, technological
change, regulatory change and competitive factors, many of which are beyond its
control. Therefore, future events and results may vary significantly from what
the Company currently foresees. The Company is under no obligation (and
expressly disclaims any such obligation) to update or alter the forward-looking
statements whether as a result of new information, future events or otherwise.
For a more detailed discussion of factors that may affect actual results, see
“Operating Risks and Uncertainties” below.

OVERVIEW

Company

     Rogers Wireless is a leading Canadian wireless communications service
provider serving over 4.0 million customers at December 31, 2003, including
approximately 3.8 million wireless voice and data subscribers and approximately
241,000 one-way messaging subscribers. The Company operates both a Global
System for Mobile Communications/General Packet Radio Service (“GSM/GPRS”)
network and a seamless integrated Time Division Multiple Access (“TDMA”) and
analog network. The GSM/GPRS network provides coverage to approximately 93% of
Canada’s population. The seamless TDMA and analog network provides coverage to
approximately 85% of Canada’s population in digital mode, and approximately 93%
of Canada’s population in analog mode. Rogers Wireless estimates that its 3.8
million wireless voice and data subscribers represent approximately 12.9% of
the Canadian population residing in its coverage area.

     Subscribers
to the Company's wireless services have access to these services
throughout the United States through our agreements with AT&T Wireless
Services, Inc. (AT&T Wireless or AWE) and other U.S. operators. The Company's subscribers also have access to
international service in over 110 countries, including throughout Europe and
Asia, through roaming agreements with other wireless communication providers.

     At
December 31, 2003, Rogers Communications Inc. (“RCI”
or “Rogers”), directly and
indirectly, beneficially owned or controlled 62,820,371 Class A Multiple Voting
Shares of the Company, representing 69.4% of the issued and outstanding Class A
Multiple Voting Shares, and 16,317,644 Class B Restricted Voting Shares of the
Company, representing 31.7% of the issued and outstanding Class B Restricted
Voting Shares, which together represented 67.4% of the total votes attached to
all voting shares of the Company currently issued and outstanding. At December
31, 2003, AWE indirectly beneficially owned or controlled 27,647,888 Class A
Multiple Voting Shares, representing 30.6% of the issued and outstanding Class
A Multiple Voting Shares, and 20,946,284 Class B Restricted Voting Shares,
representing 40.7% of the issued and outstanding Class B Restricted Voting
Shares, which together represented 31.1% of the total votes attached to all
voting shares of the Company currently issued and

 

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outstanding. The remaining 14,166,250 Class B Restricted Voting Shares,
representing 27.5% of the issued and outstanding Class B Restricted Voting
Shares and 1.5% of the total votes on selected matters, are publicly held. The
Class B Restricted Voting Shares are entitled to vote on all matters other than
the appointment of the auditors and generally on the election of directors.
The Class B Restricted Shares are entitled to elect three directors, voting
separately as a class. As a percentage of the total number of shares of the
Company currently issued and outstanding, at December 31, 2003, the Company was
55.8% owned by RCI and 34.2% owned
by AWE, with the balance publicly held.

Products and Services

     The Company offers wireless voice, data and messaging services across
Canada. Wireless voice services are available in either postpaid or prepaid
payment options. In addition, the Company’s GSM/GPRS network provides customers
with advanced high-speed wireless data services, including mobile access to the
Internet, e-mail, digital picture transmission and two-way short messaging
service (“SMS”).

Distribution Network

     The Company markets its services through an extensive national network of
over 7,000 dealer and retail locations across Canada, which include
approximately 2,500
locations selling handsets and prepaid cards and an
additional approximate 4,500
locations selling the prepaid cards. The Company’s nationwide distribution
network includes an independent dealer network, Rogers AT&T Wireless stores and
kiosks, major retail chains, such as RadioShack Canada Inc., Future Shop Ltd.
and Best Buy Canada, and convenience stores. The Company also offers many of
its products and services through a retail agreement with Rogers Video, which
is a division of Rogers Cable Inc. (“Rogers Cable”), a subsidiary of RCI, that
had 279 locations across Canada at December 31, 2003. The Company also offers
products and services and customer service on its e-business Web site,
www.rogers.com.

Wireless Networks

     The Company is a facilities-based carrier operating its wireless networks
over a broad, national coverage area with an owned and leased fibre-optic and
microwave transmission infrastructure. The seamless, integrated nature of
Rogers Wireless’ networks enables subscribers to make and receive calls and to
activate network features anywhere in the Company’s coverage area and in the
coverage area of its roaming partners as easily as if they were in their home
area.

     In June 2002, the Company completed the deployment of its digital wireless
GSM/GPRS network overlay in the 1900 megahertz (“MHz”) frequency bands. This
coverage reaches 93% of the Canadian population. During 2003, the Company also completed the deployment of GSM/GPRS technology
operating in the 850 MHz spectrum across its national footprint, which expanded
the network capacity, enhanced the quality of the GSM/GPRS network and enabled
the Company to operate seamlessly between the two frequencies. The Company’s
GSM/GPRS network provides high-speed integrated voice and “always on” packet
data transmission service capabilities.

     In late 2003, the Company began trials of Enhanced Data Rates for GSM
Evolution (“EDGE”) technology in the Vancouver, British Columbia market.
Accomplished by the installation of a network software upgrade, EDGE more than
triples the wireless data transmission speeds available on the Rogers Wireless
network. The Company intends to begin deploying EDGE across its national
GSM/GPRS network during 2004.

     The Company’s integrated TDMA and analog network is operationally seamless
in GSM/GPRS and TDMA digital functionality between the 850 MHz and
1900 MHz
frequency bands, and between TDMA digital and analog modes at 850 MHz.

 

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COMPANY STRATEGY

     The Company seeks to achieve profitable growth within the Canadian
wireless communications industry. The Company’s strategy is designed to
maximize its cash flow, as defined below, and return on investment. The key elements of the
Company’s strategy are as follows:

	 	•	 	focusing on data services that are attractive to youth and small and
medium size businesses to optimize its customer mix;
	 
	 	•	 	delivering on customer expectations by improving handset reliability,
network quality and customer service while reducing subscriber
deactivations, or churn;
	 
	 	•	 	increasing revenue from existing customers by utilizing analytical
tools to target customers likely to purchase optional services such as
voicemail, calling line ID, text messaging and wireless internet;
	 
	 	•	 	enhancing its sales distribution
channels to increase its focus on youth and
business customers;
	 
	 	•	 	maintaining a technologically advanced, high quality and pervasive
network by improving the quality of its GSM/GPRS network and increasing
capacity; and
	 
	 	•	 	leveraging its relationships with the Rogers group of companies to
provide bundled product and service offerings at attractive prices,
in addition to cross-selling, joint sales distribution and cost reduction initiatives through infrastructure sharing.

KEY PERFORMANCE INDICATORS

     The Company measures the success of its strategies using a number of key
performance indicators, which are outlined below. The following key
performance indicators are not measurements in accordance with Canadian or U.S.
GAAP and should not be considered as an alternative to net income or any other
measure of performance under Canadian or U.S. GAAP.

Subscriber Counts

     The Company determines the number of subscribers of its services based on
active subscribers. When subscribers are deactivated either voluntarily or
involuntarily for non-payment, they are considered to be deactivations in the
period the services are discontinued. Generally, each telephone number
represents one subscriber. Prepaid subscribers are considered active for a
period of six months from the date of their last revenue-generating usage.

     In the first quarter of 2003, the Company introduced enhanced reporting
classification for stratifying subscriber and revenue categories, which more
clearly reflects the emergence of data products and integrated voice and data
devices. Concurrently, the Company changed its classification of subscribers
of certain resale two-way messaging arrangements for reporting purposes. The
previous period’s subscriber and revenue categories have been reclassified to
conform to this current presentation. The Company now reports subscribers and
revenues in three categories: postpaid, prepaid and one-way messaging.
Postpaid includes voice-only and data-only subscribers, as well as subscribers
with service plans integrating both voice and data. In addition, the Company
previously reported resale two-way messaging subscribers as individual
subscribers. However, with roaming capabilities on data networks, it is
increasingly difficult to determine if these resale two-way messaging customers
are permanently resident on the Company’s data network or are transient roamers
temporarily utilizing the Company’s network. Accordingly, only those data
subscribers that are known to be permanently resident on the Company’s network
will be treated as subscribers. These enhancements to the classification of
subscriber and revenue categories had no impact on the reporting total
revenues, expenses or operating profit in the current or previous periods.

 

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Subscriber Churn

     Subscriber churn is calculated on a monthly basis. For any particular
month, subscriber churn represents the number of subscribers deactivating in
the month divided by the aggregate number of subscribers at the beginning of

the month. When used or reported for a period greater than one month,
subscriber churn represents the monthly average of the subscriber churn for the
period.

Network Revenue

     Network revenue is total revenue less revenue received from the sale of
equipment. The sale of such equipment does not materially affect the Company’s
operating income as the Company generally sells equipment to its distributors
at a price approximating cost to facilitate competitive pricing at the retail
level. Accordingly, the Company believes that network revenue is a more
relevant measure of its ability to increase its operating profit as
defined below.

Average Revenue per User (“ARPU”)

     The average revenue per user is calculated on a monthly basis. For any
particular month, ARPU represents monthly network revenue divided by the
average number of subscribers during the month. ARPU, when used in connection
with a particular type of subscriber, represents monthly network revenue
generated from these customers divided by the average number of these
subscribers during the month. When used or reported for a period greater than
one month, ARPU represents the monthly average of the ARPU calculations for each of the
months in the period. The Company believes ARPU helps indicate whether the
Company has been successful in attracting and retaining higher usage
subscribers.

Operating Expenses

     Operating expenses are segregated into four categories for assessing business performance:

	 	•	 	cost of equipment sales;
	 
	 	•	 	sales and marketing expenses, which represent
the costs to acquire new subscribers in a subscription-based business and
include items such as commissions paid to third parties for new activations, remuneration and benefits to sales and
marketing employees, as well as direct overheads related to these
activities;
	 
	 	•	 	operating, general and administrative expenses, which include all
other expenses incurred to operate the business on a day-to-day
basis, service existing subscription relationships, including
retention costs and inter-carrier
payments to roaming partners and long-distance carriers and the Canadian
Radio-television and Telecommunications Commission (“CRTC”) contribution
levy; and
	 
	 	•	 	management fees paid to RCI.

     In the wireless communications industry in Canada, the demand for services
continues to grow and the variable costs, such as
commissions for subscriber activations, as well as the fixed costs of acquiring
new subscribers are significant. Fluctuations in the number of activations of
new subscribers from period to period and the seasonal nature of the Company’s
subscriber additions result in fluctuations in sales and marketing expenses.

Cost of Acquisition per Subscriber

     Cost of acquisition per subscriber (“COA”), which is also often referred
to in the wireless communications industry as “subscriber acquisition cost” or
“cost per gross addition”, is calculated by dividing total sales and marketing
expenses plus costs related to equipment provided to existing
subscribers for the period by the total number of
gross subscriber activations. Subscriber activations include postpaid and prepaid
voice and data activations and one-way messaging activations. COA, as it
relates to a particular activation, generally is in direct proportion to the
level of ARPU and term of a subscriber’s contract.

 

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Operating Expense per Subscriber

     Operating expense per subscriber, expressed as a monthly average, is
calculated by dividing total operating, general and administrative
expenses, plus costs related to equipment provided to existing
subscribers and management fees paid to RCI by the average number of subscribers during
the period. Operating expense per subscriber is tracked as a measure of the
Company’s ability to leverage its operating cost structure across a growing
subscriber base, and the Company believes that it is an important measure of
its ability to achieve the benefits of scale as it increases its business.

Operating Profit and Operating Profit Margin

     The
Company defines operating profit as net income before
depreciation and amortization, interest expense, income taxes and
non-operating items which include foreign exchange gain (loss) and
investment and other income and the 2002 net recovery related to the
change in estimates of sales tax and CRTC contribution liabilities. Operating profit is a standard
measure used in the communications industry to assist in understanding and
comparing operating results and is often referred to by the Company’s
competitors as EBITDA (earnings before interest, taxes, depreciation and
amortization) or OIBDA (operating income before depreciation and
amortization). The Company believes this is an important measure as it allows
the Company to assess its ongoing businesses without the impact of depreciation
or amortization expenses as well as non-operating factors. It is intended to
indicate the Company’s ability to incur or service debt, invest in property,
plant and equipment (“PP&E”) and allow the Company to compare itself to its
competitors who have different capital or organizational structures. This
measure is not a defined term under GAAP.

     The Company calculates operating profit margin by dividing operating
profit by network revenue. Network revenue is used in the calculation, instead
of total revenue, because network revenue excludes the impact of the sale of
equipment, which is generally sold at a price that approximates cost to
facilitate competitive pricing at the retail level.

Additions to PP&E

     PP&E expenditures include those costs associated with acquiring and
placing into service the Company’s PP&E. Because the wireless communications
business requires extensive and continual investment in equipment, including
investment in new technologies and expansion of geographical reach and
capacity, additions to PP&E are significant and management focuses continually
on the planning, funding and management of these expenditures. The Company
focuses more on managing additions to PP&E than it does on managing
depreciation and amortization expense because additions to PP&E
have a more direct impact on the
Company’s cash flow whereas depreciation and amortization are non-cash
accounting measures required under GAAP.

 
     Additions to PP&E included in the Consolidated Statement of Cash Flows comprise additions to PP&E on a cash basis.
The additions to PP&E based on the accrual basis represent
PP&E that we actually took title to in the period. Accordingly, for
purposes of comparing our PP&E outlays, we believe that additions to PP&E on the accrual basis best reflect our cost of PP&E in a period,
and provides a more accurate determination for period-to-period comparisons. Our discussions of additions to PP&E as found in the
sections titled “Additions to PP&E” are based on the
accrual basis.

SEASONALITY

     The Company’s operating results are subject to seasonal fluctuations that
materially impact quarter-to-quarter operating results. Accordingly, one
quarter’s operating results are not necessarily indicative of what a subsequent
quarter’s operating results will be. In particular, this seasonality generally
results in relatively lower fourth quarter operating profits due primarily to
increased marketing and promotional expenditures and relatively higher levels
of subscriber additions, resulting in higher subscriber acquisition and
activation-related expenses. Seasonal fluctuation also typically occurs in the
third quarter of each year because higher usage and roaming result in higher
network revenue and operating profit.

 

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RECENT WIRELESS INDUSTRY TRENDS

Focus on Customer Retention

     The wireless communications industry’s current market penetration in
Canada is approximately 42% of the population, compared to
approximately 54% in the U.S.
and approximately 87% in the United Kingdom, and the Company expects
the Canadian Wireless industry to grow by 3 to 4
percentage points each year.
While this will produce growth, the growth is slowing compared to
historical levels. Such slowing growth has been, and will continue, driving
the increased focus on customer satisfaction, the sale to customers of new
data and voice service features and, primarily, customer retention. Due to
legislation in the U.S. and other countries regarding local number portability
and the speculation that this approach will be adopted by Canadian regulators,
customer satisfaction and retention will become even more critical in the
future.

Demand for Sophisticated Data Applications and Migration to Next
Generation Wireless Technology

     The ongoing development of wireless data transmission technologies has led
manufacturers to create wireless devices with increasingly advanced
capabilities, including access to e-mail and other corporate information
technology platforms, news, sports, financial information and services,
shopping services, and other functions. Increased demand for sophisticated
wireless services, especially data communications services, has led wireless
providers to migrate towards the next generation of digital voice and data
networks. These networks are intended to provide wireless communications with
wireline quality sound, far higher data transmission speeds and streaming video
capability. These networks are expected to support a variety of data
applications, including high-speed Internet access, multimedia services and
seamless access to corporate information systems, such as e-mail and purchasing
systems. As discussed above, the Company began trials of EDGE technology in the Vancouver market late in 2003 and intends to
begin deploying EDGE across the remainder of its national GSM/GPRS network
during 2004.

Development of Additional Technologies

     The development of additional technologies and their use by consumers may
accelerate the widespread adoption of 3G digital voice and data networks. One
such example is WiFi, which allows suitably equipped devices, such as laptop
computers and personal digital assistants, to connect to a wireless access
point. The wireless connection is only effective within a range of
approximately 100 meters and at theoretical speeds of up to 54 megabits per
second. To address these limitations, WiFi access points must be placed
selectively in high-traffic locations where potential customers frequent and
have sufficient time to use the service. Technology companies are currently
developing additional technologies designed to improve WiFi and otherwise
utilize the higher data transmission speeds found in a third generation
(“3G”) network. Future
enhancements to the range of WiFi service, and the networking of WiFi access
points may provide additional opportunities for mobile wireless operators to
deploy hybrid high-mobility 3G and limited-mobility WiFi networks, each
providing capacity and coverage under the appropriate circumstances.

OVERVIEW OF GOVERNMENT REGULATION AND REGULATORY DEVELOPMENTS

Canadian Radio-television and Telecommunications Commission

     Canadian wireless service providers, including the Company, are regulated
by the CRTC pursuant to and in accordance with requirements of the
Telecommunications Act (Canada) (the “Act”). Under the Act, the CRTC regulates
all telecommunications common carriers in Canada that provide or participate in
a communications system, including mobile voice and data and paging service
providers.

Industry Canada

     The awarding of spectrum and licences for mobile voice and data services
in Canada is under the jurisdiction of Industry Canada, a department of the
Government of Canada. Industry Canada is responsible for telecommunications
policy in Canada and has specific jurisdiction under the Radiocommunication Act
(Canada) to establish radio licencing policy and award radio licences for radio
frequencies, which are required to operate wireless communications systems.

 

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Restrictions on Non-Canadian Ownership and Control

     Pursuant to the Act and associated regulations, up to 20% of the voting
shares of a Canadian carrier, such as the Company’s operating subsidiary,
Rogers Wireless Inc. (“RWI”), and up to 33 1/3% of the voting shares of a
parent company, such as the Company or RCI, may be held by non-Canadians,
provided that neither the Canadian carrier nor its parent is otherwise
controlled by non-Canadians. Similar restrictions are contained under the
Radiocommunication Act. In April 2003, the House of Commons Industry Committee
released a report calling for the removal of foreign ownership restrictions for
telecommunications carriers and broadcasting distribution undertakings. In
June 2003, the House of Commons Heritage Committee released a report opposing
the Industry Committee’s recommendation. The Cabinet responded to the Industry
Committee report in September 2003 and to the Heritage Committee report in
November 2003. Officials from the Heritage and Industry departments will
convene to reconcile the two positions. By the spring of 2004, the Government
of Canada intends to be in a position to examine possible solutions. Rogers
Wireless supports the recommendation calling for the removal of foreign
ownership restrictions but cannot predict the nature or timing of changes that
might result.

Contribution Funding Mechanism

     In November 2000, the CRTC released a decision that fundamentally altered
the mechanism used by the CRTC to collect “contributions” to subsidize the
provision of basic local wireline telephone service. Previously, the
contribution was levied on a per minute basis on long-distance services. Under
the new contribution regime, which became effective January 1, 2001, all
telecommunications service providers, including wireless service providers such
as the Company, are required to contribute a percentage of their adjusted
Canadian telecommunications service revenues to a fund established to subsidize
the provision of basic local service. The percentage contribution levy was
4.5% in 2001 and 1.3% for 2002. In 2003, an interim rate of 1.3% was set and
in December 2003 the final rate was reduced to 1.1%, retroactive to January 1,
2003. The interim rate for 2004 has been set at 1.1% and the final rate for
2004 will not likely be set until December 2004. The final rate for 2004 would
likely be retroactive to January 1, 2004. Refer to the “Operating Risks and
Uncertainties–CRTC Revenue-Based Contribution Scheme” section for further
information on the CRTC contribution levy.

Spectrum Fee Assessment Revision

     Late in 2002, Industry Canada released a consultation paper proposing a
new methodology for calculating spectrum fee assessments (excluding auction
spectrum). Spectrum fees are currently assessed on a per radio channel basis in
the case of 850 MHz spectrum, and a per site basis for 1.9 GHz spectrum. The
new regime proposes an annual cost per MHz per population for both frequency
ranges, and, as a result, fees will be based on the amount of spectrum held by
the carrier, regardless of the degree of deployment or the number of sites. The
final rate established by Industry Canada in December 2003 is considerably
lower than the rate initially proposed. The new rates come into effect on April
1, 2004. As a result of the new methodology, there is a nominal increase in
annual spectrum fees for Rogers Wireless that will be phased in over a
seven-year period to 2011.

Spectrum Licence Issues

     Late in 2003, Industry Canada released a policy document regarding a
number of spectrum issues, including a discussion on the existing spectrum cap,
spectrum allocations for 3G networks and possible timing of a 3G spectrum
auction. Industry Canada has proposed a possible spectrum auction date of 2005
to 2006 for this spectrum. The FCC is expected to auction similar spectrum in
the 2004 to 2005 period. The Company expects that Industry Canada will follow
the spectrum allocation of the FCC and will likely proceed with the auction in
the 2005 to 2006 timeframe. A final determination on these matters is not
expected until late 2004.

Fixed Wireless Spectrum Auction

     Industry
Canada announced its intention to auction one block of 30 MHz
of spectrum in the 2,300 MHz band as well as three blocks of
50 MHz of spectrum
and one block of 25 MHz of spectrum in the 3,500 MHz band.
The auction was completed
on February 16, 2004. There were over 172 geographic licence areas in Canada for
each available block. Successful bidders for the spectrum had

 

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flexibility in determining the services to be offered and the technologies
to be deployed in the spectrum. Industry Canada expects that the spectrum will
be used for point-to-point or point-to-multi-point broadband services. Rogers
Wireless participated in this spectrum auction and as a
result, have committed to acquire 33 blocks of Spectrum in
various license areas for an aggregate bid price of $5.9 million.

COMPETITION

     At the end of 2003, the highly competitive Canadian wireless industry had
approximately 13.4 million wireless subscribers. Competition for wireless
subscribers is based on price, scope of services, service coverage, quality of
service, sophistication of wireless technology, breadth of distribution,
selection of equipment, brand and marketing.

     In the wireless voice and data market, the Company competes primarily with
three other wireless service providers, and the Company may in the future
compete with other companies including resellers using existing or emerging wireless technologies
such as WiFi or “hotspots”. Wireless messaging (or one-way paging) also
competes with a number of local and national paging providers.

     In 2003, one of the Company’s competitors, Microcell Telecommunications
Inc. (“Microcell”), which operates under the “Fido” brand, restructured its
business and financing pursuant to the Companies’ Creditors Arrangement Act
(Canada) and has emerged from court protection with a significantly reduced
debt load. This recapitalization may permit Microcell to compete in the market
more vigorously than it had prior to its restructuring.

INTERCOMPANY AND RELATED PARTY TRANSACTIONS

     From time to time, the Company enters into agreements with RCI, RCI’s
subsidiaries and other related parties that the Company believes are mutually
advantageous to the Company and its affiliates. In addition, the Company has
entered into a reciprocal roaming arrangement and other agreements related to
the marketing and delivery of wireless services with AWE, one of the Company’s
significant shareholders.

     The Company’s arrangements with RCI include a management services
agreement under which the Company receives a range of management services,
including strategic planning, financial and information technology services.
The Company also maintains contractual relationships with RCI involving other
cost sharing and services agreements. In late 2001, RCI began providing
customer service call centre services thereby expanding the contractual
relationships between the companies. In January 2003, RCI began managing the
collection of accounts receivable of the Company.

     The Company is also a party to agreements with Rogers Cable and Rogers
Media. With Rogers Cable, the Company has agreed to provide sales and
distribution services for certain of the products and services of Rogers Cable.
Rogers Cable also distributes the Company’s products and services through
Rogers Video. With Rogers Media, the Company purchases advertising at
discounted rates.

     The Company monitors its intercompany and related party agreements to
ensure that the agreements remain beneficial to the Company. The Company is
continually evaluating the expansion of existing arrangements and entry into
new contracts.

     See “Intercompany and Related Party Transactions” below.

CRITICAL ACCOUNTING POLICIES

     Management’s Discussion and Analysis of Operating Results and Financial
Position is made with reference to the Company’s Consolidated Financial
Statements and Notes thereto, which have been prepared in accordance with
Canadian GAAP. The preparation of these financial statements requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the Company’s financial statements and the reported
amount of revenues and expenses during the period. These estimates are based
on management’s historical experience and various other assumptions that are
believed to be reasonable under the circumstances, the results of which form
the basis for making judgments about the reported amounts of
revenues, expenses, assets and
liabilities that are not readily apparent from other sources. Actual results
could differ from these estimates.

 

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     The Company has identified the accounting policies outlined below as
critical to its business operations and an understanding of its results of
operations. The impact and any associated risks related to these policies on
its business operations are discussed throughout this Management’s Discussion
and Analysis.

     The Audit Committee reviews the Company’s accounting policies. The Audit
Committee also reviews all quarterly and annual filings and recommends adoption
of the Company’s annual financial statements to the Company’s Board of
Directors. For a detailed discussion on the application of these and other
accounting policies, which are reviewed by the Company’s Audit Committee, see

Note 2 to the Consolidated Financial Statements

Revenue Recognition

     The Company considers revenues to be earned as services are performed,
provided that ultimate collection is reasonably assured at the time of
performance. The Company’s revenues are categorized into the following types:

	 	•	 	monthly recurring subscriber fees in connection with wireless
services and equipment are recorded as revenue on a pro-rata basis over
the month;
	 
	 	•	 	revenue from the sale of wireless airtime, wireless long-distance and
other services are recorded as the services are provided; and
	 
	 	•	 	revenue from the sale of equipment is recorded when the equipment is
delivered and accepted by the independent dealer or customer.
Equipment subsidies provided to new and existing subscribers are
recorded as a reduction of revenues.

     Unearned revenue represents amounts received from subscribers related to
services to be provided in future periods.

     Effective
January 1, 2004, we adopted new accounting standards regarding the
timing of revenue recognition and the classification of certain items
as revenue or expense. See “- Recent Accounting Developments -
Revenue Recognition”.

Allowance for Doubtful Accounts

     A significant portion of the Company’s revenues are earned from selling on
credit to business and consumer subscribers. The allowance for doubtful
accounts, as disclosed on the Balance Sheet of the Consolidated Financial
Statements, is calculated by taking into account factors such as the Company’s
historical collection and write-off experience, the number of days the
subscriber is past due and the status of a subscriber’s account with respect to
whether or not the subscriber is continuing to receive service. As a result,
fluctuations in the aging of subscriber accounts will directly impact the
reported amount of bad debt expense. For example, events or circumstances that
result in a deterioration in the aging of subscriber accounts will in turn
increase the amount of bad debt expense. Conversely, as circumstances improve
and subscriber accounts are brought current, the reported amount of bad debt
expense will decline.

Subscriber Acquisition Costs

     The Company operates within a highly competitive industry and generally
incurs significant costs to attract new subscribers. All sales and marketing

expenditures related to subscriber acquisitions, such as commissions and
equipment subsidies, are expensed at the time of activation of the subscriber.
A large percentage of the subscriber acquisition costs, such as equipment
subsidies and commissions, are variable in nature and directly related to the
acquisition of a subscriber. In addition, subscriber acquisition costs on a
per subscriber acquired basis fluctuate based on the success of promotional
activity and seasonality of the business. Accordingly, if the Company
experiences significant growth in subscriber activations during a period,
expenses for that period will increase.

Costs of Subscriber Retention

     In keeping with the practice of expensing costs related to the acquisition
of new subscribers at the time of activation, costs related to subscriber
retention and contract renewals are expensed in the period incurred. In addition, the Company pays certain distributors a monthly percentage of
subscriber revenues for customer service and retention activities. Increased
retention activities in a given period will, in turn, increase expense in the
same period.

 

10

Capitalization of Direct Labour and Overhead

     As outlined in the recommendations of the Canadian Institute of Chartered
Accountants (“CICA”) with respect to PP&E, capitalization of costs includes the
consideration expended to acquire, construct, develop or better an item of PP&E
and includes all costs directly attributable to the acquisition, construction,
development or betterment of the assets. The cost of an item of PP&E includes
direct construction or software development costs, such as materials and
labour, and overhead costs directly attributable to the construction or
software development activity. The cost to enhance the service potential of an
item of PP&E is considered a betterment. Service potential may be enhanced
when there is an increase in the previously assessed physical output or service
capacity, associated operation costs are lowered, the life or useful life is
extended, or the quality of service is improved. Costs incurred in the
maintenance of the service potential of an item of PP&E are charged to
operating expenses as incurred.

     The Company capitalizes direct labour and direct overhead incurred to
construct new assets and better existing assets. These costs are capitalized
as they include the construction costs directly attributable to the
acquisition, construction, development or betterment of its networks through
either increased service capacity or lowered associated operating costs.
Although interest costs are permitted to be capitalized during construction,
the Company’s policy is not to capitalize such interest costs.

     Amounts of direct labour and direct overhead that are capitalized
fluctuate from year-to-year depending on the level of customer growth, new
services and network expansion. In addition, the level of capitalization
of direct labour and overhead fluctuates depending on the proportion of internal labour versus external
contractors used in construction projects.

     The percentage of direct labour capitalized is determined, in many cases,
by the nature of activities in a specific department. For example, all labour
and direct overhead of construction departments are capitalized as a result of
the capital nature of the activity performed by those departments. In some
cases, the amount of capitalization depends on the level of maintenance versus
capital activity that a department performs. In these cases, an analysis of
work activity is applied to determine this percentage allocation.

Depreciation Policies and Useful Lives

     The Company depreciates the cost of PP&E over the estimated useful
service lives of the items. These estimates of useful lives involve
considerable judgment. In determining these estimates, the Company takes into
account wireless industry trends and company-specific factors, including
changing technologies, subscriber migration between its GSM/GPRS and TDMA and
analog networks and expectations for the in-service period of these assets. On
an annual basis, the Company reassesses its existing estimates of useful lives
to ensure they match the anticipated life of the technology from a revenue
producing perspective. If technological change happens more quickly
or in a different way then the Company has
anticipated, the Company might have to shorten the estimated life of certain
PP&E, which could result in higher depreciation expense in future periods or an
impairment charge to write down the value of PP&E.

Asset Impairment

     The valuations of all long-lived assets, along with spectrum licences and
goodwill, are subject to annual reviews for impairment.

     A two-step process determines impairment of long-lived assets. The first
step determines when impairment must be measured and compares the carrying
value to the sum of the undiscounted cash flows expected to result from their
use and eventual disposition. If the carrying value exceeds this sum, a second
step is performed, which measures the amount of the impairment as the
difference between the carrying value of the long-lived asset and its fair
value, calculated using quoted market price or discounted cash flows. An
impaired asset is written down to its estimated fair market value based on the
information available at that time. Considerable management judgment is
necessary to estimate cash flows. Assumptions used in estimating these cash
flows are consistent with those used in internal forecasting and are compared
for reasonability to forecasts prepared by external analysts. Significant
changes in assumptions with respect to the competitive environment could result
in impairment of these assets.

     In testing for impairment of goodwill, the Company conducts a two-step
process. In the first step, the fair value of the Company is compared with its
carrying value. If the fair value exceeds the carrying value, no impairment is
considered to have occurred. The second step is performed when the carrying

 

11

value of the Company exceeds its fair value, in which case the implied
fair value of the Company’s goodwill is determined in the same manner as it
would be determined in a business combination.

     Spectrum licences are tested for impairment by comparing their fair values
with their carrying values, when fair values exceed carrying values no
impairment is considered to have occurred.

     The Company cannot predict whether an event that triggers an impairment
will occur, when it will occur or how it will affect the asset values reported.

     The AT&T brand licence, acquired in 1996 at an aggregate cost of $37.8
million, which provided the Company with, among other things, the right to use
the AT&T brand name, was determined to have no remaining useful life as of
December 31, 2003 because the Company had announced its intention to terminate
this brand licence agreement in early 2004. The remaining book value of $20.0
million was therefore fully amortized. See “Intercompany and Related Party
Transactions — Brand Licence Agreement” for further discussion and Note 4 to
the Consolidated Financial Statements.

Contingencies

     The Company is subject to various claims and contingencies related to
lawsuits, taxes and commitments under contractual and other commercial
obligations. The Company recognizes liabilities for contingencies when a loss
is probable and capable of being reasonably estimated. Significant changes in
assumptions as to the likelihood and estimates of the amount of a loss could
result in the recognition of an additional liability.

Related Party Transactions

     All material related party transactions are reviewed by the Audit
Committee of the Company’s Board of Directors.

     Refer to the “Intercompany and Related Party Transactions” section below
and to Note 14 to the Consolidated Financial Statements for additional
information on related party transactions.

NEW ACCOUNTING STANDARDS

     In 2003, the Company adopted the following new accounting standards as a
result of changes to Canadian and U.S. GAAP:

Asset Retirement Obligations

     Under new Canadian and U.S. accounting standards, the Company is now
required to record the fair value of the liability for an asset retirement
obligation in the year in which it is incurred and when a reasonable estimate
can be made. Fair value is defined as the amount at which that liability could
be settled in a current transaction between willing parties.

     The Company reviewed its existing contracts and commitments to determine
where such obligations exist and determined many of its contracts do
not have any such asset retirement obligations. The Company then assessed what the estimated
fair value of those obligations that exist would be and the probability that these would
be incurred. The Company determined that the fair value of the
obligations was not significant. The Company will monitor contracts on an ongoing
basis and when the Company determines that an obligation exists, the Company
will record these obligations at their fair value.

Impairment of Long-Lived Assets

     On January 1, 2003, the Company prospectively adopted the new accounting
pronouncement, “Impairment of Long-Lived Assets” which establishes standards
for the recognition, measurement and disclosure of the impairment of long-lived
assets held for use. This standard harmonizes Canadian requirements with U.S.
GAAP impairment provisions. Previously, the impairment of long-lived assets
was measured as the difference between the carrying value of the asset and the
future undiscounted net cash flows expected to be generated by the asset.
Under the new pronouncement, as discussed above, this measurement is used to
determine if impairment has occurred, and the amount of impairment is measured
as the difference between the carrying value of the asset and its fair value,
calculated using quoted market price or discounted cash flows. The adoption
had no impact on the Company, as no impairment of long-lived assets had
occurred at December 31, 2003.

 

12

RECENT ACCOUNTING DEVELOPMENTS

GAAP Hierarchy

     In
June 2003, the CICA released Handbook Section 1100,
“Generally Accepted Accounting Principles”. Previously there had
been no clear definition of the order of authority for sources of GAAP. This standard established standards for
financial reporting in accordance with Canadian GAAP and applies to our 2004 fiscal year. This section also
provides guidance on sources to consult when selecting accounting policies and on appropriate disclosures when a
matter is not dealt with explicitly in the primary sources of GAAP.

     We have reviewed this new standard, and as a result have adopted a classified balance sheet
presentation since we believe that the historical industry practice of a declassified balance sheet presentation is no longer appropriate.

     In addition, within the Consolidated Statements of Cash Flows, we have reclassified the change in non-cash,
working capital items related to PP&E to investing activities. This change had the impact of decreasing cash
used in investing activities on the Statements of Cash Flows, compared to our previous method, by $98.6 million
for the year ended December 31, 2002 and increasing cash used in
investing activities by $87.7 million for the year ended December 31,
2003. In all periods, the corresponding change was to non-cash
working capital items within operating activities.

     With
the adoption of these two changes, we believe that our accounting
policies and financial statements comply with this new standard.

Hedging Relationships

     The Company uses derivative instruments, including cross-currency interest
rate exchange agreements, interest rate exchange agreements, and foreign
exchange forward contracts, to manage risks from fluctuations in exchange rates
and interest rates. As more fully described in Note 2(s)(ii) to the
Consolidated Financial Statements, effective January 1, 2004, Canadian GAAP
will require the Company to maintain detailed documentation regarding these
derivative financial instruments in order to continue accounting for these
derivative instruments as hedges. Further, the Company will be required to
assess whether each hedging relationship is effective, both at inception and on
an on-going basis.

     If the Company determines that these derivative instruments will not
continue to be accounted for as hedges, the Company will adjust the recorded
amount of the liabilities related to these derivative instruments from their
carrying value of $136.5 million at December 31, 2003, to their fair value of
$120.4 million. The adjustment of $16.1 million will be recorded as a deferred
gain and amortized into income over the remaining life of the derivative
instruments. Going forward, this liability will be marked to market on a
quarterly basis and any changes in value will be recorded in the statement of
income. This is consistent with the Company’s treatment of these instruments
under U.S. GAAP.

Stock-Based Compensation

     Effective January 1, 2004, Canadian GAAP will require companies to
estimate the fair value of stock-based compensation to employees and to expense
the fair value over the vesting period of the options. As a result, in 2004,
the Company will begin expensing the fair value of options granted to employees
since January 1, 2002, and will record an adjustment to opening retained
earnings in the amount of $2.3 million, representing the expense for the 2002
and 2003 fiscal years. The estimated impact of adopting this accounting
standard in 2004, if the Company were to continue using the Black-Scholes
Option Pricing model, would be an increase in compensation expense of
approximately $5.0 million.

Revenue Recognition

     Effective January 1, 2004, we adopted new Canadian accounting standards, including CICA Emerging
Issues Committee Abstract 142 issued in December 2003, regarding the timing of revenue recognition and the classification of certain items as revenue or expense.

As a result of the adoption of these new accounting standards, the
following changes to the recognition and classification of revenue and expenses have been made:

	 	•	 	Activation fees are now classified as equipment revenue. Previously, these amounts were classified
as network revenue;
	 
	 	•	 	Recoveries from new and existing subscribers from the sale of equipment are now classified as
equipment revenue. Previously, these amounts were recorded as a reduction to sales expense in the
case of a new subscriber, and as a reduction to operating, general and administrative expense in the
case of an existing subscriber;
	 
	 	•	 	Equipment subsidies provided to new and existing subscribers are now classified as a reduction to
equipment revenue. Previously, these amounts were recorded as a sales
expense in the case of a new
subscriber and as an operating, general and administrative expense in the case of an existing subscriber.
Costs for equipment provided under retention programs to existing subscribers are now recorded as a cost of equipment sales.
Previously, these amounts were recorded as an operating, general and
administrative expense; and
	 
	 	•	 	Certain other recoveries from subscribers related to collections activities are now classified as
network revenue. Previously, these amounts were recorded as a
recovery of operating, general and administrative expenses.

     

The effect of this adoption on our financial results and on our key performance
 indicators is as follows:

 

 

 

	 	 	 	 	 	 	 	 	 
	  
	 	Year Ended December 31,

	  
	 	2003
	 	2002

	  
	 	(In millions of dollars, except
per subscriber data)
	Postpaid (voice
and data) revenue:
	 	 	 	 	 	 	 	 	 	 	 	 
	Prior to adoption
	 	$	1,921.0	 	 	$	1,632.9	 
	After adoption
	 	 	1,911.1	 	 	 	1,628.1	 
	Network revenue:
	 	 	 	 	 	 	 	 
	Prior to adoption
	 	 	2,039.8	 	 	 	1,759.3	 
	After adoption
	 	 	2,029.9	 	 	 	1,754.5	 
	Equipment sales:
	 	 	 	 	 	 	 	 
	Prior to adoption
	 	 	242.4	 	 	 	206.7	 
	After adoption
	 	 	177.9	 	 	 	137.0	 
	Total Operating
revenue:
	 	 	 	 	 	 	 	 
	Prior to adoption
	 	 	2,282.2	 	 	 	1,966.0	 
	After adoption
	 	 	2,207.8	 	 	 	1,891.5	 
	Cost of
equipment sales:
	 	 	 	 	 	 	 	 
	Prior to adoption
	 	 	244.5	 	 	 	209.9	 
	After adoption
	 	 	380.8	 	 	 	296.8	 
	Sales and
marketing expenses:
	 	 	 	 	 	 	 	 
	Prior to adoption
	 	 	522.7	 	 	 	462.8	 
	After adoption
	 	 	362.0	 	 	 	328.9	 
	Operating,
general and administrative expenses:
	 	 	 	 	 	 	 	 
	Prior to adoption
	 	 	787.5	 	 	 	765.5	 
	After adoption
	 	 	737.4	 	 	 	738.1	 
	Postpaid (voice
and data) ARPU:
	 	 	 	 	 	 	 	 
	Prior to adoption
	 	 	57.55	 	 	 	55.95	 
	After adoption
	 	 	57.25	 	 	 	55.78	 
	Blended ARPU:
	 	 	 	 	 	 	 	 
	Prior to adoption
	 	 	47.42	 	 	 	45.20	 
	After adoption
	 	 	47.19	 	 	 	45.07	 
	Sales and
marketing expenses per wireless gross subscriber addition:
	 	 	 	 	 	 	 	 
	Prior to adoption
	 	 	397	 	 	 	384	 
	After adoption
	 	 	376	 	 	 	366	 
	Average monthly
operating expense per wireless subscriber:
	 	 	 	 	 	 	 	 
	Prior to adoption
	 	 	17.47	 	 	 	18.42	 
	After adoption
	 	 	17.87	 	 	 	18.81	 

     These
changes in accounting classification had no effect on the amounts of reported operating profit, net income or earnings per share.
All prior period amounts, including key performance indicators, have been conformed to reflect these changes in classification.

 

 

13

ALTERNATIVE ACCEPTABLE ACCOUNTING POLICIES

     GAAP permits, in certain circumstances, alternative acceptable accounting
policies. The three primary areas where the Company has made a choice are (1)
the accounting for subscriber acquisition costs, (2) the accounting for
stock-based compensation and (3) capitalized interest.

Accounting for Subscriber Acquisition Costs

     Subscriber acquisition costs are expensed in the period incurred by the
Company. The alternative method is to defer and amortize these costs over the
life of the contract or the expected life of the relationship with the
customer. The Company has elected to expense these costs as incurred because
it believes these costs reflect period costs that may or may not be recoverable
depending on the length of the relationship with the customer, whether it be
contractual or otherwise. In addition, subscriber acquisition costs on a per
subscriber basis fluctuate based on the success of promotional activity and
seasonality of the business, and, as such, the Company believes these costs
should be reflected as costs at the point in time that they are incurred.

Accounting for Stock-Based Compensation Costs

     The Company does not record any expense for employee stock options;
however, it provides note disclosure of the pro forma expense using the
fair-value-based method of accounting calculated using the Black-Scholes Option
Pricing model. While the Company acknowledges that stock options represent a
form of compensation, it elected to disclose the pro forma expense in Note 9(d)
to the Consolidated Financial Statements, rather than expense such
compensation, to maintain comparability with other peer companies. In response
to activities and decisions by accounting standard setters in Canada in respect
to the adoption of mandatory expensing of stock options, as described above,
effective January 1, 2004, the Company will adopt the policy of expensing the
fair value of stock options granted to employees.

Capitalized Interest

     Canadian GAAP permits, but does not require, the capitalization of
interest expense as part of the cost of acquiring certain assets that require a
period of time to prepare for their intended use. The Company does not
capitalize interest as part of its PP&E expenditures.

U.S. GAAP DIFFERENCES

     The Company prepares its financial statements in accordance with Canadian
GAAP. U.S. GAAP differs from Canadian GAAP in certain respects. The areas of
principal differences and their impact on the Company’s Consolidated Financial
Statements are described in Note 18 to the Consolidated Financial Statements.
The significant differences include:

	 	•	 	goodwill arising on purchase transactions;
	 
	 	•	 	accounting for interest capitalization and the related depreciation impact;
	 
	 	•	 	accounting for development and pre-operating costs; and
	 
	 	•	 	accounting for changes in the fair value of financial instruments.

Goodwill Arising on Purchase Transactions

     Under U.S. GAAP, purchase transactions that result in an entity becoming a
wholly-owned subsidiary establish a new basis of accounting for the entity
purchased and its assets and liabilities. As a result of RCI’s acquisition of
100% of the Company in 1989, for U.S. GAAP purposes, the Company must record as
an asset in its Consolidated Financial Statements the amount of goodwill that
was recorded on the consolidated financial statements of RCI. As this
acquisition was financed principally by the parent company with proceeds from
other asset sales, the corresponding adjustment for the assets recorded was an
increase in shareholders’ equity.

 

14

     At the time of the acquisition by RCI, Canadian GAAP did not permit a
subsidiary company to alter the historical costs of its assets or liabilities
upon it being acquired. This difference increases goodwill and shareholders’
equity by $521.9 million.

Accounting for Interest Capitalization and the Related Depreciation Impact

     U.S. GAAP requires capitalization of interest costs as part of the
historical cost of acquiring certain qualifying assets that require a period of
time to prepare for their intended use. This is not required under Canadian
GAAP. The impact of capitalizing interest under U.S. GAAP is to increase net
income by $5.7 million in 2003 and $6.5 million in 2002. The corresponding
depreciation expense impact related to interest capitalized in previous years
is to increase depreciation expense for the years ended December 31, 2003 and
2002 by $3.0 million and $2.2 million, respectively.

Accounting for Development and Pre-Operating Costs

     Under Canadian GAAP, the Company defers the incremental costs relating to
the development and pre-operating phases of new businesses and amortizes these
costs on a straight-line basis over periods up to five years. Under U.S. GAAP,
these costs are expensed as incurred. As a result, under U.S. GAAP the
consolidated net income for each of the years ended December 31, 2003 and 2002
was increased by $3.0 million, representing the amortization of pre-operating
costs under Canadian GAAP.

Accounting for Changes in the Fair Value of Financial Instruments

     Under U.S. GAAP, the changes in fair value of cross-currency interest rate
exchange agreements and interest rate exchange agreements are recorded as an
adjustment to net income. Accordingly, the Company’s net income under U.S.
GAAP has been decreased by $102.8 million in 2003 and increased by $88.1
million in 2002.

OPERATING AND FINANCIAL RESULTS

     For purposes of this discussion, revenue has been classified according to the following categories:

	 	•	 	postpaid voice and data revenues generated principally from:

	 	–	 	monthly fees,
	 
	 	–	 	airtime and long-distance charges,
	 
	 	–	 	optional service charges,
	 
	 	–	 	system access fees, and
	 
	 	–	 	roaming charges;
	 

	 	•	 	prepaid revenues generated
principally from charges of airtime, for long-distance charges and
text messaging;
	 
	 	•	 	one-way messaging revenues generated from monthly fees and usage
charges; and
	 
	 	•	 	equipment sales revenues generated from the sale of hardware and
accessories to independent dealers, agents and retailers, and directly
to subscribers through direct fulfillment by the Company’s customer
service groups, its website and telesales.

     Operating expenses are segregated into four categories for assessing business performance:

	 	•	 	cost of equipment sales;
	 
	 	•	 	sales and marketing expenses, which represent
all costs to acquire new subscribers (other than those related to
equipment), such as advertising, commissions
paid to third parties for new activations,
remuneration and benefits to sales and marketing employees as well as
direct overheads related to these activities;
	 
	 	•	 	operating, general and administrative expenses, which include all
other expenses incurred to operate the business on a day-to-day basis,
as well, it includes costs to service existing subscriber
relationships including costs (other than those related to equipment); and inter-carrier payments to roaming partners and long-distance
carriers and the CRTC contribution levy;

 

15

	 	•	 	management fees paid to RCI.

     The
wireless communications industry in Canada continues to grow and the
costs of acquiring new subscribers are significant. Because a
substantial portion of subscriber activation costs are variable in
nature, such as commissions and equipment subsidies paid for each new
activation, and due to fluctuations in the number of activations of new
subscribers from period to period and the seasonal nature of these subscriber
additions, the Company experiences material fluctuations in sales and marketing
expenses and, accordingly, in the overall level of operating expenses.

 

16

Year Ended December 31, 2003 Compared to Year Ended December 31, 2002

Summarized Consolidated Financial Results

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	Years ended December 31,	 	 	 	 
	 	 	 	
	 	 	 	 
	(In
millions of dollars, except per share data)	 	2003	 	2002	 	% Chg
	 	 	 	
	 	
	 	

	Operating revenue
	 	 	 	 	 	 	 	 	 	 	 	 
	 	Postpaid
(voice and data)(1)(2)
	 	$	1,911.1	 	 	$	1,628.1	 	 	 	17.4	 
	 	Prepaid
	 	 	91.2	 	 	 	91.2	 	 	 	—	 
	 	One-way messaging
	 	 	27.6	 	 	 	35.2	 	 	 	(21.6	)
	 
	 	 	
	 	 	 	
	 	 	 	
	 
	 	Network
revenue (1)
	 	2,029.9	 	 	 	1,754.5	 	 	 	15.7	 
	 	Equipment
revenue (1)
	 	177.9	 	 	 	137.0	 	 	 	29.9	 
	 	 
	 	 	
	 	 	 	
	 	 	 	
	 
	Total operating revenue
	 	 	2,207.8	 	 	 	1,891.5	 	 	 	16.7	 
	Operating expenses (1)
	 	 	 	 	 	 	 	 	 	 	 	 
	 	Cost of equipment sales
	 	 	380.8	 	 	 	296.8	 	 	 	28.3	 
	 	Sales
and marketing expenses
	 	 	362.0	 	 	 	328.9	 	 	 	10.1	 
	 	Operating, general and administrative expenses
	 	 	737.5	 	 	 	738.1	 	 	 	—	 
	 	Management fees
	 	 	11.3	 	 	 	11.0	 	 	 	2.7	 
	 	 
	 	 	
	 	 	 	
	 	 	 	
	 
	Total operating expenses
	 	 	1,491.6	 	 	 	1,374.8	 	 	 	8.5	 
	 	 
	 	 	
	 	 	 	
	 	 	 	
	 
	Operating profit (3)
	 	 	716.2	 	 	 	516.7	 	 	 	38.6	 
	 	Change in estimate of sales tax and
CRTC contribution liabilities
	 	 	—	 	 	 	(12.3	)	 	 	—	 
	 	Depreciation and amortization
	 	 	518.6	 	 	 	457.1	 	 	 	13.5	 
	 	 
	 	 	
	 	 	 	
	 	 	 	
	 
	Operating income
	 	 	197.6	 	 	 	71.9	 	 	 	174.8	 
	Interest expense
	 	 	(193.5	)	 	 	(195.2	)	 	 	(0.9	)
	Gain on repayment of long-term debt
	 	 	—	 	 	 	31.0	 	 	 	—	 
	Foreign exchange gain
	 	 	135.2	 	 	 	6.4	 	 	 	—	 
	Investment and other income
	 	 	0.9	 	 	 	0.5	 	 	 	80.0	 
	Income taxes
	 	 	(2.4	)	 	 	(5.3	)	 	 	(54.7	)
	 	 
	 	 	
	 	 	 	
	 	 	 	
	 
	Net income (loss)
	 	$	137.8	 	 	$	(90.7	)	 	 	—	 
	 	 
	 	 	
	 	 	 	
	 	 	 	
	 
	Earnings (loss) per share -
basic and diluted
	 	$	0.97	 	 	$	(0.64	)	 	 	—	 
	Total assets
	 	$	3,107.3	 	 	$	3,185.0	 	 	 	(2.4	)
	Total liabilities
	 	$	2,664.3	 	 	$	2,885.5	 	 	 	(7.7	)
	Addition
to property, plant
	 	 	 	 	 	 	 	 	 	 	 	 
	 	and equipment
	 	$	411.9	 	 	$	564.6	 	 	 	(27.0	)
	Operating
profit margin as % of network(3)(4)
	 	 	 	 	 	 	 	 	 	 	 	 
	 	Revenue
	 	 	35.3	%	 	 	29.4	%	 	 	 	 

	(1)	 	As reclassified. See the
“Recent Accounting Developments – Revenue Recognition”
section.
	 
	(2)	 	The 2002 period presentation of subscriber and revenue categories has
been reclassified to conform to the current presentation. See the “Key
Performance Indicators — Subscriber Counts” section.
	 
	(3)	 	As previously defined. See
the “Key Performance Indicators — Operating
Profit” section.
	 
	(4)	 	Operating profit margin as a percentage of network revenue is a key performance
indicator for the reasons indicated in the “Key Performance
Indicators — Operating Profit Margin” section and is calculated as follows:

	 	 	 	 	 	 	 	 	 
	($millions)	 	2003	 	2002
	Network revenue
	 	$	2,029.9	 	 	$	1,754.5	 
	 
	 	 	
	 	 	 	
	 
	Operating profit
	 	$	716.2	 	 	$	516.7	 
	 
	 	 	
	 	 	 	
	 
	Operating
profit margin — 2003
	 	$	716.2 divided by
$2,029.9 = 35.3%
	Operating
profit margin — 2002
	 	$	516.7 divided by
$1,754.5 = 29.4%

 

17

Wireless Operating Highlights and Significant Developments of 2003

	 	•	 	Network revenue increased 15.7% and operating profit increased 38.6%
compared to 2002. Operating profit margin based on network revenue rose
by 590 basis points year-over-year to 35.3%.

	 	•	 	2003 PP&E expenditures decreased by $152.7 million, or 27.0%, over
2002 due to the substantial completion of the initial roll-out of the
nationwide GSM/GPRS network in 2002.
	 
	 	•	 	Growth in operating profit, combined with reduced spending on PP&E
and lower interest costs, resulted in a $353.9 million year-over-year
improvement in operating profit cash flow.
	 
	 	•	 	Postpaid voice and data ARPU
increased year-over-year by $1.47, or
2.6%, to $57.25, reflecting the continued activation and retention of
higher valued customers, increased penetration of enhanced services and

the continued growth of wireless data and roaming revenues.
	 
	 	•	 	Postpaid voice and data subscriber net additions of 400,200 were
higher by 19.3% versus the 335,400 net additions in 2002, reflecting
both higher levels of gross activations and reduced churn levels.
Average monthly postpaid churn for the year declined to 1.88% from 1.98%
in the previous year.
	 
	 	•	 	Revenues from wireless data
services, which grew 124.8%
year-over-year to $67.9 million from $30.2 million in the prior year,
represented approximately 3.3% of network revenue compared to 1.7% in
2002.
	 
	 	•	 	The Company completed its deployment of GSM/GPRS technology operating
in the 850 MHz spectrum range across its national footprint, expanding
the capacity and also enhancing the quality of the GSM/GPRS network.
Rogers Wireless also began trials of EDGE technology in the Vancouver
market at the end of 2003 which, accomplished by the installation of a
network software upgrade, more than triples the wireless data
transmission speeds available on its network.
	 
	 	•	 	On March 8, 2004, the Company will begin transitioning its branding
to Rogers Wireless from Rogers AT&T Wireless, bringing greater clarity
to the Rogers brand in Canada. As a result, the Company recorded a
non-cash charge in 2003 of approximately $20.0 million to reflect the
accelerated amortization of the associated brand licence costs.
	 
	 	•	 	The Company recorded net income of $137.8 million in 2003 compared to
a loss of $90.7 million in 2002. The primary reasons for the
improvement were a $125.7 million increase in operating income combined
with the recognition of $128.8 million of additional foreign exchange
gains primarily resulting from the translation of the unhedged portion
of U.S. dollar-denominated long-term debt as the Canadian dollar
strengthened against the U.S. dollar.

 

18

Wireless Network Revenue and Subscribers

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	Years Ended December 31,	 	 	 	 	 	 	 	 
	 	 	 	
	 	 	 	 	 	 	 	 
	(Subscriber statistics in thousands, except ARPU, churn and usage)	 	2003	 	2002	 	Chg	 	% Chg
	 	 	 	
	 	
	 	
	 	

	Postpaid (Voice and Data)(1)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Gross additions
	 	 	1,021.5	 	 	 	910.7	 	 	 	110.8	 	 	 	12.2	 
	 	Net additions
	 	 	400.2	 	 	 	335.4	 	 	 	64.8	 	 	 	19.3	 
	 	Total subscribers
	 	 	3,029.6	 	 	 	2,629.3	 	 	 	400.3	 	 	 	15.2	 
	 	ARPU ($)(3)(4)
	 	 	57.25	 	 	 	55.78	 	 	 	1.47	 	 	 	2.6	 
	 	Average monthly usage (minutes)
	 	 	361	 	 	 	324	 	 	 	37	 	 	 	11.4	 
	 	Churn (%)
	 	 	1.88	 	 	 	1.98	 	 	 	(0.10	)	 	 	(5.1	)
	Prepaid
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Gross additions
	 	 	257.4	 	 	 	243.3	 	 	 	14.1	 	 	 	5.8	 
	 	Net additions (losses)
	 	 	2.0	 	 	 	44.2	 	 	 	(42.2	)	 	 	(95.5	)
	 	Adjustment to subscriber base(2)
	 	 	(20.9	)	 	 	—	 	 	 	(20.9	)	 	 	—	 
	 	Total subscribers(2)
	 	 	759.8	 	 	 	778.7	 	 	 	(18.9	)	 	 	(2.4	)
	 	ARPU ($)(3)
	 	 	10.08	 	 	 	10.17	 	 	 	(0.09	)	 	 	(0.9	)
	 	Churn (%)
	 	 	2.82	 	 	 	2.23	 	 	 	0.59	 	 	 	26.5	 
	Total – Postpaid and Prepaid
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Gross additions
	 	 	1,278.9	 	 	 	1,154.0	 	 	 	124.9	 	 	 	10.8	 
	 	Net additions
	 	 	402.2	 	 	 	379.6	 	 	 	22.6	 	 	 	6.0	 
	 	Adjustment to subscriber base(2)
	 	 	(20.9	)	 	 	—	 	 	 	(20.9	)	 	 	—	 
	 	Total subscribers(2)
	 	 	3,789.4	 	 	 	3,408.0	 	 	 	381.4	 	 	 	11.2	 
	 	ARPU (blended) ($)(3)(4)
	 	 	47.19	 	 	 	45.07	 	 	 	2.12	 	 	 	4.7	 
	One-Way Messaging
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Gross additions
	 	 	42.5	 	 	 	61.0	 	 	 	(18.5	)	 	 	(30.3	)
	 	Net additions
	 	 	(61.1	)	 	 	(68.3	)	 	 	7.2	 	 	 	(10.5	)
	 	Total subscribers
	 	 	241.3	 	 	 	302.3	 	 	 	(61.0	)	 	 	(20.2	)
	 	ARPU ($)(3)
	 	 	8.40	 	 	 	8.79	 	 	 	(0.39	)	 	 	(4.4	)
	 	Churn (%)
	 	 	3.13	 	 	 	3.20	 	 	 	(0.07	)	 	 	(2.2	)

	(1)	 	The 2002 period’s presentation of subscribers and revenue has been
reclassified to conform to the current presentation as discussed in the
“Key Performance Indicators — Subscriber Counts” section above.
	 
	(2)	 	The Company’s policy is to treat prepaid subscribers with no usage for a
six month period as a reduction of the prepaid subscriber base. As part
of a review of prepaid subscriber usage in the second quarter of 2003, the
Company determined that a number of subscribers, totaling 20,900, which
only had non-revenue usage (i.e. calls to customer service) over the past
several quarters, were being included in the prepaid subscriber base. The
Company determined that these subscribers should not have been included in
the prepaid subscriber base and, as such, made an adjustment to the
opening prepaid subscriber base. The Company has amended its policy to
reflect all prepaid subscribers with no revenue-generating usage in a six
month period as deactivations.
	 
	(3)	 	See “Key Performance
Indicators — Average Revenue per Subscriber”
section.
	 
	(4)	 	As reclassified. See the “
Recent  Accounting Developments - Revenue Recognition” section. 

Wireless Network Revenue

     Wireless
network revenue in 2003, which accounted for 91.9% of the
Company’s total revenue, was $2,029.9 million, an increase
of 15.7% from 2002.
This revenue growth reflects the 11.2% increase in the number of wireless voice
and data subscribers over fiscal 2002 and a 4.7% year-over-year increase in
blended postpaid and prepaid ARPU.

     Postpaid voice and data subscriber additions in 2003 represented 79.9% of
total gross activations and close to 100% of total net additions. The Company
continued its strategy of targeting higher value postpaid subscribers and
selling its prepaid handsets at higher price points which contributed
significantly to the mix of postpaid versus prepaid subscribers.

     The 2.6% increase in average monthly revenue per postpaid voice and data
subscriber compared to the previous year reflected the continued activation and
retention of higher value customers, increased penetration of enhanced
services, and the continued growth of wireless data and roaming revenues. The
growth in data revenues from $30.2 million to $67.9 million represented
approximately 68.5% of the 2.6% ARPU increase. Prepaid ARPU remained
relatively flat on a year-over-year basis.

     The continuing trend to lower postpaid voice and data subscriber churn, as
reflected in the 1.88% rate in 2003 versus 1.98% in 2002, is directly related
to both the Company’s strategy of acquiring higher value, more stable customers
on longer term contracts and an enhanced focus on customer retention. The
Company’s focus on customer retention aims to ensure that customers receive

 

19

responsive, quality service at every point of contact with the Company.
The Company attributes the increase in prepaid churn to 2.82% in the current
year to the impact of competitive prepaid offers.

     One-way messaging (or “paging”) subscriber churn has remained relatively
stable on a year over year basis declining to 3.13% in 2003 from 3.20% in the
previous year. With 241,300 paging subscribers, the Company continues to view
paging as a profitable but mature business segment and recognizes that churn
will likely continue at relatively high rates as one-way messaging subscribers
increasingly migrate to two-way messaging and converged voice and data
services.

Wireless Equipment Sales Revenue

     In 2003, revenue from wireless voice, data and messaging equipment sales
was $177.9 million, up $40.9 million, or 29.9%, from the prior year. The
increase in equipment revenues reflects both the higher cost of more
sophisticated handsets and devices and the significantly higher volume of
postpaid voice and data customer gross additions. However, this increase in
sales does not materially affect the Company’s operating profit as the Company
generally sells equipment to distribution at a price approximating cost to
facilitate competitive pricing at the retail level.

Wireless Operating Expenses

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	Years ended December	 	 	 	 	 	 	 	 
	 	 	 	31,	 	 	 	 	 	 	 	 
	 	 	 	
	 	 	 	 	 	 	 	 
	(In millions of dollars, except per subscriber statistics)	 	2003	 	2002	 	Chg	 	% Chg
	 	 	 	
	 	
	 	
	 	

	Operating
expenses(1)(2)(3)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Cost of equipment sales
	 	$	380.8	 	 	$	296.8	 	 	$	84.0	 	 	 	28.3	 
	 	Sales
and marketing expenses(4)
	 	 	362.0	 	 	 	328.9	 	 	 	33.1	 	 	 	10.1	 
	 	Operating, general and administrative expenses
	 	 	737.5	 	 	 	738.1	 	 	 	(0.6	)	 	 	—	 
	 	Management fees
	 	 	11.3	 	 	 	11.0	 	 	 	0.3	 	 	 	2.7	 
	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	Total operating expenses
	 	$	1,491.6	 	 	$	1,374.8	 	 	$	116.8	 	 	 	8.5	 
	 	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	Average monthly operating expense per
subscriber before sales, marketing
and equipment margin(1)(3)(4)
	 	$	17.87	 	 	$	18.81	 	 	$	(0.94	)	 	 	(5.0	)
	Sales and marketing expenses per gross
subscriber addition (including equipment margin)
	 	$	376	 	 	$	366	 	 	$	10	 	 	 	2.7	 

	(1)	 	As reclassified. See the “-
Recent Accounting Developments - Revenue Recognition” section.

	 
	(2)	 	The 2002 period presentation has been reclassified to conform to the
current presentation. Customer retention costs are included in
operating, general and administrative costs.
	 
	(3)	 	Operating expenses for the year ended December 2002 exclude the benefit
of the change in the estimate of sales tax and CRTC contribution
liabilities of $12.3 million.
	 
	(4)	 	Sales and marketing expenses exclude margin on equipment sales.

     Total
operating expenses were $1,491.6 million, up 8.5% from $1,374.8
million in 2002. Cost of equipment sales increased by approximately
$84.0
million as a result of increased equipment revenues. These costs do not
materially affect the Company’s operating profit as the Company generally sells
equipment to distributors at a price approximating cost to facilitate
competitive pricing at the retail level.

     Operating,
general and administrative expenses decreased by $0.6 million
in 2003 over 2002. The slight decrease is attributable to
savings related to more favourable roaming arrangements and
operating efficiencies across various functions offset by increased
customer care and retention spending. Retention spending includes
spending on retention programs, excluding equipment upgrades, costs
associated with the Company’s customer loyalty and renewal programs and
payments to the Company’s distributors for ongoing service of the Company’s
existing customers. The Company is continually focused on operating
efficiencies and cost reduction programs which in turn have served to offset
the impact of the growth in the subscriber base, allowing operating profit
margins to expand.

 

20

     Average monthly operating expense per subscriber, excluding sales and
marketing expenses and equipment cost of sales, decreased $0.94, or
5.0%, to
$17.87 in 2003, compared to $18.81 in 2002. This year-over-year reduction
reflects scale economies from the larger subscriber base, roaming cost
reductions, and improved efficiencies in call centre and network maintenance
operations offset by increased costs related to customer retention.

     At December 31, 2003, the Company, as a result of its sales and retention
strategies, had approximately 67% of its postpaid wireless voice and data
subscriber base under contracts with an initial term of greater than 12 months,
up from 61% at December 31, 2002.

Wireless Sales and Marketing Expenses

     The 10.1% year-over-year increase in total sales and marketing expenses
was due to higher variable acquisition costs associated with the 12.2%
year-over-year increase in the number of postpaid voice and data gross
additions. In addition, variable sales and marketing expenses increased in line
with the Company’s strategy to attract higher value business customers and
customers on longer term contracts. The Company also invested more in
advertising and promotion on a year-over-year basis as it emphasized the value
proposition related to data and other product offerings. Sales and marketing
expenses per wireless subscriber gross addition were $376, an
increase of $10,
or $2.7%, from $366 in 2002, attributable to increases in equipment
subsidies required to match competitive offers.

Wireless Operating Profit

     Revenue increased at a faster rate than expenses, resulting in operating
profit growth of $199.5 million, or 38.6%, to $716.2 million in 2003 from
$516.7 million in 2002. Operating profit as a percentage of network revenue, or
operating profit margin, improved in 2003 to 35.3% from 29.4% in 2002.

Reconciliation of Operating Profit to Net Income (Loss)

     Taking into account the other income and expense items below operating
profit, the Company recorded net income of $137.8 million in 2003, compared to
a loss of $90.7 million in 2002. The improvement in net income of $228.5
million was primarily a result of: (1) a year-over-year increase in operating
profit of $199.5 million, and (2) a stronger Canadian dollar resulting in an
increase in foreign exchange gain of $128.8 million, which was partially offset
by an increase of $61.5 million in depreciation and amortization expense due to
the increased fixed asset base and the accelerated amortization of the brand
licence, and a reduction in 2003 of the gain on repurchase of long-term debt of
$31.0 million. Other income and expense items required to reconcile operating
profit to operating income and net income (loss) as defined under Canadian GAAP
are as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Years ended December 31,	 	 	 	 	 	 	 	 
	 	 	
	 	 	 	 	 	 	 	 
	(In millions of dollars)	 	2003	 	2002	 	Chg	 	% Chg
	 	 	
	 	
	 	
	 	

	Operating profit(1)
	 	$	716.2	 	 	$	516.7	 	 	$	199.5	 	 	 	38.6	 
	Change in estimate of sales tax and
CRTC contribution liabilities
	 	 	—	 	 	 	12.3	 	 	 	(12.3	)	 	 	—	 
	Depreciation and amortization
	 	 	(518.6	)	 	 	(457.1	)	 	 	(61.5	)	 	 	13.5	 
	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	Operating income
	 	 	197.6	 	 	 	71.9	 	 	 	125.7	 	 	 	174.8	 
	Interest expense on long-term debt
	 	 	(193.5	)	 	 	(195.2	)	 	 	1.7	 	 	 	(0.9	)
	Foreign exchange gain
	 	 	135.2	 	 	 	6.4	 	 	 	128.8	 	 	 	—	 
	Gain on repurchase of long-term debt
	 	 	—	 	 	 	31.0	 	 	 	(31.0	)	 	 	—	 
	Investment and other income
	 	 	0.9	 	 	 	0.5	 	 	 	0.4	 	 	 	80.0	 
	Income taxes
	 	 	(2.4	)	 	 	(5.3	)	 	 	2.9	 	 	 	54.7	 
	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	Net income (loss)
	 	$	137.8	 	 	$	(90.7	)	 	$	228.5	 	 	 	—	 
	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 

	(1)	 	As previously defined. See the
“Key Performance Indicators — Operating Profit”
section.

 

21

Depreciation and Amortization

     The year-over-year increase in depreciation and amortization expense was
primarily due to PP&E expenditure levels in prior years and the resulting
higher fixed asset levels and depreciation relating to the GSM/GPRS network
overlay.

     The cost of the AT&T brand licence was deferred and amortized to expense
on a straight-line basis over the 15-year term of the brand licence agreement.
During 2003, the Company announced that it would terminate its brand licence
agreement in early 2004 and change its brand name to exclude the AT&T brand.
Consequently, the Company accelerated the amortization of the brand licence to
reduce the carrying value to nil.

Interest on Long-Term Debt

     The $1.7 million reduction in interest expense in 2003, compared to 2002,
reflects the reduced debt levels in 2003. Long-term debt has declined to
$2.210 billion at December 31, 2003, from $2.360 billion at December 31, 2002.
The reduction in debt levels are directly related to the impact of the change
in foreign exchange related to the improvement in the Canadian dollar versus
the U.S. dollar.

Foreign Exchange

     The Canadian dollar continued to strengthen in relation to the U.S.
dollar, continuing the trend experienced in 2002, and accordingly, the Company
recorded a foreign exchange gain of $135.2 million, compared to $6.4 million in
2002, related to both realized and unrealized foreign exchange gains, primarily
as a result of the translation of the unhedged portion of U.S.
dollar-denominated long-term debt.

Income Taxes

     Income taxes for 2003 consisted primarily of current income tax expense
related to the Federal Large Corporations Tax, offset by tax recoveries of
prior years.

Additions to PP&E

     Additions to
 PP&E totaled $411.9 million in 2003, a decrease of $152.7
million, or 27.0%, from $564.6 million in 2002. Network-related additions to
 PP&E of $338.2 million included $251.3 million for capacity expansion
of the GSM/GPRS network and transmission infrastructure and $66.1 million for
expanded coverage as well as construction of new sites for improved coverage in
existing service areas and for expanded coverage. The Company has continued to
construct the infrastructure necessary for enhanced digital coverage and
lower-cost incremental capacity by adding channels on existing sites. The cost
to complete the deployment of GSM/GPRS equipment in the 850 MHz frequency band
that was initiated during the fourth quarter of 2002 and completed in late 2003
is included in the network capacity expansion costs above. The remaining
balance of $20.8 million in network-related additions to
 PP&E related primarily
to technical upgrade projects, the operational support systems, and the
addition of new services. Other Additions to PP&E consisted of $51.1 million
for information technology initiatives, $8.7 million for the completion of the
expansion of the Company’s headquarters facilities, and $13.9 million for call
centres and other facilities and equipment.

EMPLOYEES

     Remuneration represents a material portion of the expenses of the Company.
The Company ended the year with approximately 2,360 full-time-equivalent
employees, an increase of 40 from 2,320 at December 31, 2002. The increase in
staff was primarily concentrated in the areas of sales and marketing as the
Company focused its subscriber acquisition programs and service and retention
efforts on customer segments that would yield greater value to the Company.

     Total remuneration paid to employees (both full and part-time) in 2003 was
approximately $164.2 million, an increase of $5.3 million
or 3.3% from $158.9
million in the prior year.

 

22

LIQUIDITY AND CAPITAL RESOURCES

Operations

     Cash
generated from operations before changes in non-cash operating items, which is
calculated by adding all non-cash items including depreciation and
amortization, back to net income, increased to $522.0 million in 2003 from
$310.6 million in 2002. The $211.4 million increase is mainly the result of the
increase in operating profit as discussed above.

     Taking into account the changes in non-cash operating items for the 2003 fiscal
year, cash generated from operations increased by $132.2 million
to $496.5
million compared to $364.3 million in the previous year. The
change in working capital is mostly attributable to increased income
levels offset by increased levels of accounts receivable primarily
related to growth in network revenue.

     Cash
flow from operations of $496.5 million, together with $4.8 million
received from the issuance of Class B Restricted Voting Shares under employee
share purchase plans and the exercise of employee options, resulted in total
funds raised in 2003 of approximately $501.3 million.

     These
funds were used (1) to fund PP&E expenditures (net of change
in non-cash working capital), of $499.6 million, (2)
for net repayments under the Company’s bank credit facility of $11.0 million
and (3) for a $5.0 million net repayment of capital leases and mortgages. In
total, $515.6 million of funds were used in 2003, resulting in a cash deficit
of $14.3 million for the year. Taking into account the $10.1 million cash
balance at the beginning of the year, the cash deficit at the end of 2003 was
$4.2 million.

     The Company expects to continue to incur significant PP&E expenditures.
In 2004, Rogers Wireless expects to incur PP&E expenditures of between $400.0
million and $425.0, million primarily associated with the addition of network
capacity to accommodate subscriber additions, increases in usage, expansion of
geographical coverage and quality enhancements in certain areas of its network.
PP&E expenditures also include amounts for information technology and general
PP&E. The Company expects operating profit to increase in 2004 and the Company
anticipates generating a net cash surplus in 2004. Rogers Wireless believes
that it will have sufficient capital resources to satisfy its cash funding
requirements in 2004, taking into account cash from operations.

Financing

     The Company’s long-term financial instruments are described in Note 8 to
the Consolidated Financial Statements. Financing activity is outlined below.

     The Company’s required repayments on all long-term debt in the next five
years totals $1.24 billion, excluding an aggregate $2.5 million effect of
cross-currency interest rate exchange agreements. In 2004 and 2005, required
repayments total $3.3 million. In 2006, required repayments total $182.7
million, mainly comprised of $160.0 million for the repayment of the 10 1/2%
Senior Secured Notes due 2006 and $22.2 million for the repayment of a mortgage
due 2006. In 2007, required repayments total $485.1 million, mainly comprised
of $253.5 million for the repayment of the 8.30% Senior Secured Notes due 2007
and $231.4 million for the repayment of the 8.80% Senior Subordinated Notes due
2007. In 2008, required repayments total $568.6 million, comprised of $430.6
million for the repayment of the 9 3/8% Senior Secured Debentures due 2008 and
$138.0 million outstanding under the bank credit facility at December 31, 2003.
The three debt issues that mature in 2007 and 2008 are currently redeemable.
The Company is considering whether or not to redeem one or more of these debt
issues, which may involve the incurrence of debt.

     The Company’s bank credit facility, amended in April 2001, provides a
revolving facility of up to $700.0 million, and the Company also has an
operating line of credit that provides for up to $10.0 million. The terms of
the bank credit facility generally impose the most restrictive limitations on
the Company’s operations and activities, as compared to the Company’s other
debt instruments. The most significant of these restrictions are debt
incurrence and maintenance tests based upon certain ratios of debt to adjusted
operating profit. The Company is currently in compliance with all of the
covenants under its respective debt instruments, and it expects to remain in
compliance with all of these

 

23

covenants. Based on the Company’s most restrictive covenants at December
31, 2003, the Company could have borrowed over $1.8 billion of additional
long-term debt, of which $562.0 million could have been borrowed under its bank
credit facility.

     Rogers Wireless’ $700.0 million amended bank credit facility reduces by
20% on April 30, 2006 and again on April 30, 2007, with the final 60% reduction
on April 30, 2008. However, the bank credit facility will mature on May 31,
2006 if the Company’s Senior Secured Notes due 2006 are not repaid (by
refinancing or otherwise) on or prior to December 31, 2005. If these Notes are
repaid, but the Company’s Senior Secured Notes due 2007 are not repaid (by
refinancing or otherwise) on or prior to April 30, 2007, then the bank credit
facility will mature on September 30, 2007.

     On October 24, 2003, Moody’s Investor Services changed the ratings outlook
on the Company’s Senior Secured and Senior Subordinated public debt, which are
rated Ba3 and B2 respectively, to positive from stable. In addition, on
October 30, 2003, Standard & Poor’s revised its ratings outlook on the
Company’s Senior Secured and Senior Subordinated public debt, which are rated
BB+ and BB- respectively, to positive from stable. On
April 11, 2003 Fitch Ratings changed the ratings outlook on the
Company’s Senior Secured and Senior Subordinated public debt,
which are rated BBB- and BB respectively, to stable from
negative.

     The Company does not have any off-balance sheet arrangements other than
the cross-currency interest rate exchange agreements described below.

Interest Rate and Foreign Exchange Management

     The Company uses derivative financial instruments to manage its risks from
fluctuations in foreign exchange and interest rates. These instruments include
interest rate and cross-currency interest rate exchange agreements, foreign
exchange forward contracts and, from time-to-time, foreign exchange option
agreements. All such agreements are used for risk management purposes only and
are designated as a hedge of specific debt instruments. In order to minimize
the risk of counterparty default under these agreements, Rogers Wireless
assesses the creditworthiness of these counterparties. At December 31, 2003,
all of the Company’s counterparties to these agreements were financial
institutions with a Standard & Poor’s rating (or other equivalent) ranging from
A+ to AA.

     Because the Company’s operating profit is almost exclusively denominated
in Canadian dollars, the incurrence of U.S. dollar-denominated debt has caused
significant foreign exchange exposure. The Company has established a target of
hedging at least 50% of its foreign exchange exposure through the use of
instruments outlined above. At December 31, 2003 and 2002, the Company had
U.S. dollar-denominated long-term debt of U.S.$1,353.3 million. At December
31, 2003 and 2002, U.S.$885.0 million or 65.4% was hedged with cross-currency
interest rate exchange agreements at an average exchange rate of $1.4466 to
U.S.$1.00.

     The cross-currency interest rate exchange agreements have the effect of
converting the interest rate on U.S.$500.0 million of long-term debt from an
average U.S. dollar fixed interest rate of 9.63% per annum to a weighted
average Canadian dollar fixed interest rate of 10.29% per annum on $779.7
million. The interest rate on an additional U.S.$385.0 million has been
converted from a U.S. dollar fixed interest rate of 9.38% per annum to $500.5
million at a weighted average floating interest rate equal to the Canadian
bankers’ acceptance rate plus 2.35% per annum, which totaled 5.11% at December
31, 2003, compared to 5.22% at December 31, 2002.

     Total long-term debt at fixed interest rates at December 31, 2002 and 2003
was $1,170.6 million and $1,571.1 million, or 72.5% and 71.1%, respectively, of
total long-term debt. The Company’s effective weighted average interest rate
on all long-term debt as at December 31, 2003, including the effect of the
interest rate and cross-currency exchange agreements, was 8.32% per annum,
compared to 8.42% at December 31, 2002.

     The Company will continue to monitor its hedged position with respect to
interest rate and foreign exchange fluctuations and, depending upon market
conditions and other factors, may adjust its hedged position with respect to
foreign exchange fluctuations or interest rates in the future by unwinding
certain existing hedges and/or by entering into new cross-currency interest
rate exchange agreements or by using other hedging instruments.

     The following table summarizes the effect of changes in the foreign
exchange rate on the unhedged portion of the Company’s U.S. dollar-denominated
debt and the resulting change in the principal carrying amount of debt,
interest expense and earnings per share based on a full year impact.

 

24

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Change in	 	Change in	 	 	 	 
	 	 	 	 	debt principal	 	interest	 	Earnings
	 	 	 	 	amount	 	expense	 	per
	Change in Cdn$ vs. US$(1)	 	($ millions)	 	($ millions)	 	share(2)
	
	 	
	 	
	 	

	$	0.01	 	 	$	4.7	 	 	$	0.4	 	 	$	0.036	 
	 	0.03	 	 	 	14.0	 	 	 	1.2	 	 	 	0.108	 
	 	0.05	 	 	 	23.4	 	 	 	2.1	 	 	 	0.179	 
	$	0.10	 	 	$	46.8	 	 	$	4.1	 	 	$	0.359	 

	(1)	 	Canadian equivalent of unhedged U.S. dollar-denominated debt if U.S.
dollar costs an additional Canadian cent.
	 
	(2)	 	Assumes no income tax effect. Based on the number of basic shares
outstanding as at December 31, 2003.

     At December 31, 2003, interest expense would have increase by $6.4 million
per year if there was a 1% increase in the interest rates on the portion of the
Company’s long-term debt that is not at fixed interest rates.

INTERCOMPANY AND RELATED PARTY TRANSACTIONS

The Company has entered into a number of intercompany agreements with RCI, the
Company’s parent, and its other subsidiaries. These agreements govern the
management, commercial and cost-sharing arrangements that the Company has with
RCI and its other subsidiaries, including Rogers Cable. The Company also has
entered into a number of agreements with AT&T Wireless, which holds a
significant equity interest in the Company and other companies previously
affiliated with AT&T Wireless. The AT&T Wireless agreements principally relate
to commercial matters and the Company’s corporate governance. The RCI and AT&T
Wireless agreements and arrangements are summarized below.

The Company monitors intercompany and related party agreements to ensure the
agreements remain beneficial to the Company. The Company continually
evaluates the expansion of existing arrangements and the entry into new
agreements. The Company’s agreements with the Rogers group of companies have
historically focused on areas of operations in which joint or combined services
provide efficiencies of scale or other synergies. For example, beginning in
late 2001, RCI began managing the customer call center operations of both the
Company and Rogers Cable, with a goal of improving productivity, increasing
service levels and reducing cost.

Most recently, the Company’s arrangements with RCI and its other subsidiaries
are increasingly focusing on sales and marketing activities. In February 2004,
the Company’s board of directors approved two additional arrangements between
Rogers Cable and the Company:

	 	•	 	Distribution. The Company will provide management services to
Rogers Cable in connection with the distribution of Rogers Cable
products and services through retail outlets and dealer channels and
will also manage Rogers Cable’s e-commerce relationships. The Company
also may manage other distribution relationships for Rogers Cable if
mutually agreed by Rogers Cable and the Company.

	 	•	 	Rogers Business Services. The Company will establish a division,
Rogers Business Solutions, that will provide a single point of contact
to offer the full range of the Company’s products and services and
Cable’s products and services to small and medium businesses and, in
the case of telecommunication virtual private network services, to
corporate business accounts and employees.

The definitive terms and conditions of the agreements between Rogers Cable and
the Company relating to these arrangements will be subject to the approval of
the audit committee of the Company’s board of directors.

In addition, the Company continues to look for other operations and activities
that it can share or jointly operate with other companies within the Rogers
group. Specifically, the Company is considering the expansion of intercompany
arrangements relating to sales and marketing activities as well as other
arrangements that may result in greater integration with other companies within
the Rogers group. The Company may also provide billing and other services to
Rogers Cable in connection with its launch of local telephony services. In the future, market conditions may require the Company
to further strengthen its arrangements to better coordinate and integrate its
sales and marketing and operational activities with its affiliated companies.
Any new arrangements, including the proposed new arrangements described above,
will be entered into only if the Company believes such arrangements are in the
Company’s best interest.

AT&T Arrangements

     In November 1996, the Company entered into a long-term strategic alliance
with AT&T Corp. (“AT&T”), AT&T’s affiliate, AT&T Canada Enterprises Inc. (“AT&T
Canada Enterprises”) and its then affiliates, AWE and AT&T Canada Inc. (“AT&T
Canada”). AT&T Canada, now renamed Allstream Inc., offers local and
long-distance telephone and data transmission services to business customers in
Canada. This strategic alliance included, among other things, a brand licence
agreement under which the Company was granted a licence to use, on a co-branded
basis, the AT&T brand in connection with the marketing of wireless
communications services.

     In 1999, the Company entered into a renewed long-term strategic alliance
with AWE, AT&T Canada Enterprises and AT&T Canada involving a number of
agreements. In January 2003, the Company’s supply and marketing agreement and
non-competition agreement with AT&T Canada were terminated. The relevant
agreements between the Company and AWE, AT&T Canada Enterprises or AT&T Canada,
as applicable, are described below.

Brand Licence Agreement

     The Company entered into an amended brand licence agreement with AT&T
Canada Enterprises under which it was granted a licence to use the AT&T brand
on a co-branded basis in connection with the marketing of the Company’s
wireless services. In December 2003, the Company and AT&T Canada Enterprises
amended the brand licence agreement to permit the Company to terminate the
agreement at any time, but not later than March 31, 2004. The Company has
given notice of termination that will become effective March 8, 2004.
Following a windup period of nine months, the Company will cease to use the
AT&T brand and will thereafter carry on business as Rogers Wireless. The
Company is required to pay a royalty of approximately $2.5 million per month to
AT&T Canada Enterprises during the windup period until the Company ceases to
advertise using the AT&T brand.

AWE Investment in the Company

     In 1999, as part of the renewed strategic alliance, AT&T and British
Telecommunications plc (“BT”) created JVII, a partnership that was 50%
indirectly owned by each of AT&T Corp. and BT Corp. Through JVII, AT&T and BT acquired an
equity interest of approximately 33 1/3% in the Company for a purchase price of
approximately $1.4 billion in 1999. In preparation for its spin-off of AWE,
AT&T Corp. transferred its interest in JVII to AWE. In June 2001, AWE acquired BT’s
interest in JVII. Also in 2001, through JVII, AWE participated in an equity
rights offering to finance the Company’s acquisition of additional spectrum
licences. AWE’s equity interest in the Company is currently approximately
34.2%. As described below, there are certain rights and restrictions
associated with any future sale of this interest in Rogers Wireless that JVII
might contemplate.

 

25

Mobile Wireless Marketing, Technology and Services Agreement

     The Company entered into an amended and restated mobile wireless
marketing, technology and services agreement with AWE that enables them to
share marketing and technology information and requires the parties to work
together to develop networks with common features for their respective
subscribers. This agreement may be terminated at any time by either party.
No amounts are payable under the agreement.

Roaming Agreements

     The Company maintains a reciprocal roaming agreement with AWE whereby AWE
provides wireless communications services to the Company’s subscribers when
they travel to the U.S. and the Company provides the same services to AWE
subscribers when they travel to Canada. This agreement may be terminated upon
short notice by either party.

Over-the-Air Activation Agreement

     The Company currently utilizes the services of AWE for automated
“over-the-air” (“OTA”) programming of subscriber handsets. The current
agreement with AWE expires March 31, 2004, at which time the Company will
assume responsibility for OTA programming.

Shareholders Agreement

     In connection with the JVII investment described above, the Company, RCI,
and JVII entered into a shareholders agreement. Pursuant to the shareholders
agreement, RCI has agreed as a shareholder of the Company to cause JVII to have
the following rights:

	 	•	 	various governance rights with respect to the Company and its
wholly-owned subsidiary, RWI, including the ability to nominate four
directors to each Board of Directors and representation on each
committee of such Boards of Directors;
	 
	 	•	 	the ability to nominate any Chief Technology Officer for the Company or RWI;
	 
	 	•	 	the requirement for JVII’s consent to certain transactions involving the Company or RWI including:

	 	–	 	a sale of all or substantially all of its assets, including a sale of control of RWI;
	 
	 	–	 	a decision by the Company or any
of its subsidiaries including RWI to carry on a business other than specified wireless businesses;
	 
	 	–	 	certain issuances of equity securities by the Company;
	 
	 	–	 	the entering into by the Company with certain competitors of
AWE of any material contract which is outside the ordinary course of
business of the Company.
	 
	 	–	 	certain amalgamations, mergers or business combinations; and
	 
	 	–	 	the entering into of certain related party transactions;
	 
	 	–	 	the issuance of indebtedness by the Company that would result
in total indebtedness for borrowed money outstanding in excess of
five times earnings before interest, taxes, depreciation and
amortization (“EBITDA”) based on 12-month trailing EBITDA calculated
on a consolidated basis;
	 
	 	–	 	the grant by RCI to JVII of
a right to make a first offer and a right of first negotiation in
respect of that offer if RCI wishes to transfer its shares of the
Company (other than to members of the Rogers group of companies or
pursuant to other exceptions).

     The shareholders agreement also provides for, among other things:

	 	•	 	JVII’s agreement to support any going-private transaction relating to
the Company which is initiated by RCI and which does not dilute JVII’s
equity and voting interest in the Company, subject to certain liquidity
rights in favour of AWE;
	 
	 	•	 	a requirement that JVII convert all of the Class A Multiple Voting
Shares owned by it into Class B Restricted Voting Shares if any person
other than AWE and permitted transferees become the beneficial owners
of, directly or indirectly, more than a majority of the equity shares of
JVII, or have the power, in law or in fact, to direct the management and
policies of JVII;

 

26

	 	•	 	the grant by RCI to JVII of the right to make a first offer, and a
right of first negotiation in respect to that offer, if RCI wishes to
sell any shares of the Company (other than to members of the Rogers
group of companies, the Rogers Family or pursuant to other exceptions);
	 
	 	•	 	the grant by JVII to RCI of the right to make a first offer, and a
right of first negotiation in respect to that offer, if JVII decides to
sell any of its shares of the Company;
	 
	 	•	 	certain shotgun rights of first refusal in the event that a material
competitor of AWE acquires control of RCI at a time when, among other
requirements, the Brand Licence Agreement is in effect (the Company on
March 8, 2004 will begin transitioning its branding to Rogers Wireless
from Rogers AT&T Wireless); and
	 
	 	•	 	the Company has agreed that if the Company proposes to issue treasury
shares, each of RCI and JVII has a pre-emptive right to purchase
additional shares of the Company in order to maintain their respective
voting and equity interests in the Company (subject to exceptions).

     If JVII notifies RCI that it wishes to sell all or any portion of its
shares of the Company and if RCI does not purchase those shares under its right
of first offer and right of first negotiation, JVII may sell the shares to
third parties provided, amongst other things, that (i) any Class A Multiple
Voting Shares of the Company to be sold are first converted into Class B
Restricted Voting Shares, (ii) such shares are sold to any third party at a
price greater than the highest price offered to RCI under its right of first
offer and first negotiation and (iii) JVII may not sell to any one third party,
shares representing more than 5% of the equity of the Company (or 10% in the
case of certain service providers to the Company) to any one party.

     The shareholders agreement terminates in certain circumstances, including
(subject to exceptions) in the event that JVII ceases to own at least 20% of
the equity shares of the Company.

     Concurrently with entering into of the shareholders agreement, the Company
entered into a registration rights agreement with JVII. Under that agreement,
in connection with a sale by JVII of shares of the Company to a third party or
parties, JVII is entitled, subject to certain limitations, to require the
Company to qualify the sale of such shares pursuant to a prospectus or
registration statement filed with Canadian or U.S. securities regulators.

RCI Arrangements

Management Services Agreement

     The Company has entered into a management services agreement with RCI
under which RCI provides executive, administrative, financial, strategic
planning, information technology and various additional services to the
Company. Those services relate to, among other things, assistance with tax
advice, Canadian regulatory matters, financial advice (including the
preparation of business plans and financial projections and the evaluation of
PP&E expenditure proposals), treasury services, service to the Company’s Boards
of Directors and committees of the Boards of Directors, and advice and
assistance on relationships with employee groups, internal audits, investor
relations, purchasing and legal services. In return for these services, the
Company has agreed to pay RCI fees equal to the greater of $8 million per year
(adjusted for changes in the Canadian Consumer Price Index from January 1,
1991) and an amount determined by both RCI and the independent directors
serving on the Company’s Audit Committee. The Company also has agreed to
reimburse RCI for all out-of-pocket expenses incurred with respect to services
provided to it by RCI under the management services agreement.

 

27

Call Centres

     The Company is a party to an agreement with RCI pursuant to which RCI
provides customer service functions through its call centres. The Company pays
RCI commissions for new subscriptions, products and service options purchased
by subscribers through the call centres. The Company reimburses RCI for the
cost of providing these services based on the actual costs incurred. The
Company is not obligated to pay additional amounts and may receive a refund if
costs, based on actual call volume multiplied by an agreed upon cost per call
rate, are higher than actual costs. In addition, the Company owns the assets
used in the provision of services. This agreement is for an indefinite term
and is terminable upon ninety days notice.

Invoicing of Common Customers

     Pursuant to an agreement with Rogers Cable, the Company purchases the
accounts receivable of Rogers Cable for common subscribers who elect to receive
a consolidated invoice. The Company is compensated for costs of bad debts,
billing costs and services and other determinable costs by purchasing these
receivables at a discount. The discount is based on actual costs incurred for
the services provided and is reviewed periodically. This agreement is for a
term of one year.

Accounts Receivable

     RCI manages the subscriber account collection activities of the Company.
The Company is responsible, however, for the costs incurred in the collection
and handling of the Company’s accounts.

Real Estate

     The Company leases, at market rates, office space to RCI and RCI’s
subsidiaries. RCI also manages the real estate leased or owned by the Company.
The Company reimburses RCI for the costs it incurs based on various factors,
including the number of sites managed and employees utilized.

Wireless Services

     The Company provides wireless services to RCI and its subsidiaries. The
fees received by the Company are based on actual usage at market rates.

Distribution of Company’s Products and Services

     Rogers Cable and the Company have entered into an agreement for the sale
of the Company’s products and services through the Rogers Video retail outlets
owned by Rogers Cable. The Company pays Rogers Cable commissions for new
subscriptions equivalent to amounts paid to third-party distributors.

Distribution of Rogers Cable’s Products and Services

     The Company has agreed to provide retail field support to Rogers Cable and
to represent Rogers Cable in the promotion and sales of its business products
and services. Under the retail field support agreement, the Company’s retail
sales representatives receive sales commissions for achieving sales targets
with respect to Rogers Cable’s products and services, the cost of which to the
Company is reimbursed by Rogers Cable.

Transmission Facilities

     The Company has entered into agreements with Rogers Cable to share the
construction and operating costs of certain co-located fibre-optic transmission
and microwave facilities. The costs of these facilities are allocated based on
usage or ownership, as applicable. Since there are significant fixed costs
associated with these transmission links, the Company has achieved economies of
scale by sharing these facilities with Rogers Cable, resulting in reduced
capital costs.

     In addition, the Company receives payments from Rogers Cable for the use
of its data, circuits, data transmission and links. The price of these
services is based on usage.

 

28

Advertising

     The Company advertises its products and services through radio stations
and other media outlets owned by Rogers Media. The Company receives a discount
from the customary rates of Rogers Media.

Other Cost Sharing and Services Agreements

     The Company has entered into other cost sharing and services agreements
with RCI and its subsidiaries in the areas of accounting, purchasing, human
resources, accounts payable processing, remittance
processing, payroll processing, e-commerce, the RCI data centre and other
common services and activities. Generally, these services are provided to the
Company and other RCI subsidiaries by RCI and have renewable terms of one year
and may be terminated by either party on 30 to 90 days notice. To the extent
that RCI incurs expenses and makes PP&E expenditures, these costs are typically
reimbursed by the Company, on a cost recovery basis, in accordance with the
services provided on behalf of the Company by RCI.

Corporate Opportunity

     The Company has agreed with RCI under a business areas and transfer
agreement that RCI will, subject to any required regulatory, lender or other
approvals, continue to conduct all of its cellular telephone operations and
related mobile communications businesses through the Company.

     In July 1999, the business areas and transfer agreement was amended to
permit RCI and its subsidiaries, other than the Company and its subsidiaries,
to resell the wireless communications services and products that the Company
may agree to supply to RCI and its subsidiaries.

     RCI has also agreed with the Company that if RCI acquires, through one or
more transactions, a controlling interest in assets or operations that are
within Rogers Wireless’ permitted businesses, as described below, RCI will,
subject to any required regulatory, lender or other approvals, promptly offer
to transfer RCI’s interest in those assets and operations to Rogers Wireless
for a purchase price equal to RCI’s cost, if readily determinable, or otherwise
RCI’s determination of fair value of the assets, plus, in either case, costs
and expenses incurred by RCI in transferring the assets and operations to
Rogers Wireless. If RCI’s determination of fair value with respect to any such
offer is in excess of $10.0 million and if the Company’s independent directors
disagree with such determination, then the fair value shall be determined by an
independent appraiser chosen by the independent directors of the Company.

     In order to reduce difficulties that may arise in allocating business
opportunities, the Company’s Articles of Incorporation, as amended, provide
that, unless the holders of a majority of its Class A Multiple Voting Shares
otherwise consent, it is prohibited from engaging, directly or indirectly
through its subsidiaries, in businesses other than (i) the business that it
engaged in on June 17, 1991 and (ii) mobile communications services. At
present, RCI holds the majority of the Company’s Class A Multiple Voting
Shares.

     Mobile communications services are defined as communications services
where either the terminal from which the communications originated or on which
the communications are alternately received or both, are mobile radio
communications devices (including, in each case, mobile communications devices
that are being used in a fixed mode). These include, but are not limited to,
cellular telephone equipment sales and related services, paging and mobile
voice/data equipment sales and related services, local area personal
communications networks and all activities reasonably necessary or incidental
thereto.

     In August 1999, as part of the shareholders agreement with JVII, RCI
irrevocably consented to the Company and its subsidiaries carrying on wireline
telecommunications businesses outside of the cable territories operated by
affiliates of RCI, subject to the Company complying with its contractual and
other legal obligations to JVII. The foregoing limitations automatically
terminate and the Company may thereafter engage in any lawful business at such
time as RCI no longer holds, directly or indirectly, capital stock of the
Company representing 20% or more of the combined voting power of all of its
outstanding capital stock.

     The Company’s Articles of Incorporation provide that neither it nor any
shareholder of Rogers Wireless will have a claim against RCI or any director or
officer thereof, or of an affiliate, for a breach of a fiduciary duty on
account of a diversion of a corporate opportunity unless:

 

29

	 	•	 	the opportunity related solely to a business in which the Company is
authorized to engage, and
	 
	 	•	 	the Company’s directors who are not affiliated with RCI have not
disclaimed the opportunity by majority vote thereof.

     For purposes of the Company’s Articles of Incorporation, “solely” means,
with respect to any entity, that 80% or more of its revenues or assets is
derived from or dedicated to businesses in which the Company is permitted to
engage. Notwithstanding such limitations on liability in the Company’s Articles
of Incorporation, the Company’s directors and officers are subject to a
statutory duty of good faith under the Canada Business Corporations Act and
this duty is not waived by the provisions of the Company’s Articles of
Incorporation.

Minority Shareholders Protection Agreement

     The Company has entered into a shareholder protection agreement with RCI
that extends certain protections to holders of the Company’s Class B Restricted
Voting Shares (“RWCI’s Restricted Voting Shares”). The Company has agreed with
RCI that:

	 	•	 	in respect to a “going-private” transaction involving the Company
proposed by RCI or insiders, associates or affiliates thereof:

	 	–	 	a formal valuation of RWCI’s Restricted Voting Shares will be
prepared by an independent valuer,
	 
	 	–	 	the consideration offered per share will not be less than the
value or will be within or exceed the range of values per share
arrived at in the formal valuation, and
	 
	 	–	 	such transaction will be subject to approval by the majority of
the minority of RWCI’s Restricted Voting Shares (minority
shareholders will exclude the Company’s affiliates); and

	 	•	 	in respect to an issuer bid or insider bid made by RCI or any of its subsidiaries relating to the Company:

	 	–	 	a formal valuation will be prepared by an independent valuer, and
	 
	 	–	 	the consideration offered per share to holders of RWCI’s
Restricted Voting Shares will not be less than 66 2/3% of the value
(or of the midpoint of the range of values) arrived at in the formal
valuation.

     The Company and RCI have also agreed under the terms of the shareholder
protection agreement that a committee of independent directors of the Company
will be responsible for the selection of the independent valuer and will review
and report to the Board of Directors on any transaction. The Board of Directors
will be required to disclose its reasonable belief as to the desirability or
fairness of the transaction to holders of RWCI’s Restricted Voting Shares.

     The shareholder protection agreement provides certain instances in which a
transaction is not subject to the valuation and minority approval requirements,
including if the price to be offered to all shareholders is arrived at through
arm’s length negotiations with a selling holder of a sizeable block of RWCI’s
Restricted Voting Shares, provided such holder had full knowledge and access to
information concerning the Company. Further, a going-private transaction will
not be subject to minority shareholder approval where 90% or more of the
outstanding RWCI’s Restricted Voting Shares are held by RCI or its affiliates.
RCI has agreed that, so long as RCI owns or controls shares representing 50% or
more of the voting interest of the shares of the Company, RCI will not vote any
of RWCI’s Restricted Voting Shares which it may own or control with respect to
the election of the three directors to be elected by the holders of RWCI’s
Restricted Voting Shares as a class.

     The provisions of the shareholder protection agreement may not be waived
or amended by the Company or RCI without the approval of the majority of
holders of RWCI’s Restricted Voting Shares, excluding any holder who was an
affiliate of the Company. The rights and obligations under the shareholder
protection agreement are in addition to any applicable requirements of law and
regulatory authorities.

 

30

Summary of Charges From (To) Related Parties

     The
following table provides a summary of all significant charges from
(to) related parties, which have been accounted for at exchange amounts:

	 	 	 	 	 	 	 	 	 	 
	(in thousands of dollars)	 	2003	 	2002
	 	 	 	
	 	

	RCI:
	 	 	 	 	 	 	 	 
	 	Management fees
	 	$	11,336	 	 	$	11,006	 
	 	Rent income
	 	 	(7,980	)	 	 	(8,144	)
	 	Wireless
products and services
	 	 	(978	)	 	 	(79	)
	 	Cost of shared operating expenses
	 	 	192,292	 	 	 	208,257	 
	 	Cost of PP&E(1)
	 	 	24,656	 	 	 	37,418	 
	 	 
	 	 	
	 	 	 	
	 
	 
	 	 	219,326	 	 	 	248,458	 
	Cable:
	 	 	 	 	 	 	 	 
	 	Wireless products and services for
resale
	 	 	(14,926	)	 	 	(10,116	)
	 	Subscriber activation commissions
and customer service
	 	 	9,511	 	 	 	8,817	 
	 	Rent income
	 	 	(3,516	)	 	 	(3,587	)
	 	Wireless
products and services
	 	 	(2,355	)	 	 	(2,214	)
	 	Consolidated
billing services
	 	 	(1,499	)	 	 	(655	)
	 	Transmission facilities usage
	 	 	440	 	 	 	440	 
	 	 
	 	 	
	 	 	 	
	 
	 
	 	 	(12,345	)	 	 	(7,315	)
	Media:
	 	 	 	 	 	 	 	 
	 	Advertising
	 	 	3,000	 	 	 	2,940	 
	 	Rent income
	 	 	(8,493	)	 	 	(1,881	)
	 	Wireless services
	 	 	(516	)	 	 	(181	)
	 	 
	 	 	
	 	 	 	
	 
	 
	 	 	(6,009	)	 	 	878	 
	AWE:
	 	 	 	 	 	 	 	 
	 	Roaming revenue
	 	 	(13,030	)	 	 	(13,910	)
	 	Roaming expense
	 	 	13,628	 	 	 	18,028	 
	 	Over-the-air activation
	 	 	292	 	 	 	680	 
	 	 
	 	 	
	 	 	 	
	 
	 
	 	 	890	 	 	 	4,798	 
	 	 
	 	 	
	 	 	 	
	 
	 
	 	$	201,862	 	 	$	246,819	 
	 	 
	 	 	
	 	 	 	
	 

	(1)	 	Cost of PP&E relates primarily to expenditures on information technology
infrastructure and call centre technologies.

     The Company has entered into certain transactions with companies, the
partners or senior officers of which are directors of the Company and RCI.
During 2003 and 2002, total amounts paid by the Company to these related
parties for legal services and commissions paid on premiums for insurance
coverage aggregated $1.5 million and $1.7 million, respectively, and for
interest charges aggregated $12.0 million and $8.3 million, respectively.

OUTSTANDING SHARE DATA

     Set out below is the outstanding share data for the Company as at December
31, 2003. For additional detail, please see Note 9 to the Consolidated
Financial Statements.

	 	 	 	 	 
	Common
Shares
	 	 	 	 
	Class A Multiple Voting
	 	 	90,468,259	 
	Class B Restricted Voting
	 	 	51,430,178	 
	Options
to Purchase Class B Restricted Voting Shares
	 	 	 	 
	Outstanding Options
	 	 	4,227,097	 
	Exercisable Options
	 	 	2,291,372	 

DIVIDENDS

     The Company did not pay dividends in 2003 or 2002.

COMMITMENTS AND CONTRACTUAL OBLIGATIONS

Contractual Obligations

     The Company’s material obligations under firm contractual arrangements are
summarized below as at December 31, 2003. See also Notes 8(j) and 16(b) of the
Consolidated Financial Statements.

 

31

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Contractual Obligations	 	Payments due by period
	
	 	

	 	 	Less than	 	 	 	 	 	 	 	 	 	More than	 	 	 	 
	(in thousands of dollars)	 	1 year	 	1-3 years	 	3-5 years	 	5 years	 	Total
	 	 	
	 	
	 	
	 	
	 	

	Long-term debt(1)
	 	$	—	 	 	$	160,000	 	 	$	1,053,485	 	 	$	833,469	 	 	$	2,046,954	 
	Mortgages and capital leases
	 	 	2,378	 	 	 	23,579	 	 	 	228	 	 	 	—	 	 	 	26,185	 
	Operating leases
	 	 	34,394	 	 	 	54,526	 	 	 	26,330	 	 	 	19,342	 	 	 	134,592	 
	Purchase obligations(2)
	 	 	75,354	 	 	 	19,362	 	 	 	22,948	 	 	 	5,811	 	 	 	123,475	 
	Other long-term liabilities
reflected on the Balance
Sheet under GAAP
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	 	 	

	Total
	 	$	112,126	 	 	$	257,467	 	 	$	1,102,991	 	 	$	858,622	 	 	$	2,331,206	 
	 	 	

	(1)	 	The bank credit facility will mature on May 31, 2006, if the Company’s
Senior Secured Notes due 2006 are not repaid (by financing or otherwise)
on or prior to December 31, 2005. If these notes are repaid, then the
bank credit facility will mature on September 30, 2007 if the Company’s
Senior Secured Notes due 2007 are not repaid (by financing or otherwise)
on or prior to April 30, 2007.

	(2)	 	Purchase obligations consist of agreements to purchase goods and services
that are enforceable and legally binding and that specify all significant
terms including fixed or minimum quantities to be purchased, price
provisions and timing of the transaction. In addition, the Company incurs
expenditures for other items that are volume-dependant. An estimate of
what the Company will spend in 2004 on these items is as follows:

	(i)	 	The Company is required to pay an annual spectrum licensing and CRTC
contribution fees to Industry Canada. The Company estimates its total
payment obligations to Industry Canada will be approximately $60.0 million
in 2004.

	(ii)	 	Payments to acquire
customers in the form of commissions and payments
to retain customers in the form of residuals are made pursuant to
contracts with these distributors. The Company estimates that payments to distributors and other retailers
will be approximately $340.0 million in 2004.

	(iii)	 	The Company is required to make payments to other communications
providers for interconnection, roaming and other services. The Company
estimates the total payment obligation to be approximately $145.0 million
in 2004.

	(iv)	 	The Company estimates its total payments to a major network
infrastructure supplier to be approximately $165.0 million in 2004.

OPERATING RISKS AND UNCERTAINTIES

     The Company’s business is subject to several operating risks and
uncertainties that could result in a material adverse effect on its business
and financial results as outlined below.

Risk of Insufficient Future Demand for Advanced Services

     It is expected that a substantial portion of future revenue growth will be
achieved from new and advanced wireless voice and data transmission services.
Accordingly and as discussed above, the Company has invested and continues to
invest significant capital resources in the development of its GSM/GPRS network
in order to offer these services, and also intends to invest capital resources
in the deployment of EDGE technology across its GSM/GPRS network. However,
consumers may not provide sufficient demand for these advanced wireless
services. Alternatively, Rogers Wireless may fail to anticipate demand for
certain products and services, or may not be able to offer or market these new
products and services successfully to subscribers. Rogers Wireless’ failure to
attract subscribers to new products and services, or failure to keep pace with
changing consumer preferences for wireless services, would slow revenue growth
and have a material adverse effect on the Company’s business and financial
condition.

Potential Competitiveness or Compatibility of EDGE technology

     The deployment by Rogers Wireless of EDGE technology may not be
competitive or compatible with other technologies. While Rogers Wireless and
AWE have selected this technology as an evolutionary step from their current to
future networks, there are other competing technologies that are being
developed and implemented by the wireless industry. None of the competing
technologies are directly compatible with each other. If the next generation
technology that gains the most widespread acceptance is not compatible with
Rogers Wireless’ networks, competing services based on such alternative
technology may be preferable to subscribers.

Potential Impact of Change in Foreign Ownership Legislation

     The Company could face increased competition if, as discussed in the
“Overview of Government Regulation and Regulatory Developments” section above,
there is a removal or relaxation of the limits on foreign ownership and control
of wireless licences. Legislative action to remove or relax these limits

 

32

could
result in foreign telecommunication companies entering the Canadian wireless
communications market, through the acquisition of either wireless licences or
of a holder of wireless licences. Such companies could have significantly
greater capital resources than the Company. The Company supports removal of
the limits on foreign ownership and control and believes that removal would
give the Company greater access to lower cost capital.

Potential Effect of Wireless Industry Pricing

     Aggressive pricing by industry participants in previous years caused
significant reductions in Canadian wireless communications pricing. Rogers
Wireless believes that competitive pricing is a factor in causing churn. It
cannot predict the extent of further price competition and customer churn into
the future, but it anticipates some ongoing re-pricing of its existing
subscriber base, as lower pricing offered to attract new customers is extended
to or requested by existing customers. In addition, as wireless penetration of
the population deepens, new wireless customers may generate lower average
monthly revenues than Rogers Wireless’ existing customers, which could slow
revenue growth.

     The Company cannot anticipate what, if any, impact new wireless
communications services or lower prices could have on overall market growth. It
intends to compete vigorously for all customer segments, focusing on the
business, consumer and youth segments, and in all Canadian geographic markets
based on the strengths of its extensive networks and broad digital services
coverage, strong brands and wide distribution presence.

CRTC Revenue-Based Contribution Scheme

     Commencing January 1, 2001, Rogers Wireless was required to make payments
equal to an annual percentage of adjusted revenues in accordance with the new
revenue-based contribution scheme. The percentage of adjusted revenues payable
is revised annually by the CRTC. The CRTC has announced a contribution levy of
1.1% as both the final rate for 2003 and the interim rate for 2004. While the
rate has been reduced modestly over each of the last two years, the Company
cannot anticipate the final rate for 2004 or the rates for future years. An
increase in the rate would have a negative impact on operating profits.

3G Spectrum Allocation

     As discussed in the “Overview of Government Regulation and Regulatory
Developments” section above, Industry Canada has released a proposed policy
regarding 3G spectrum allocation and a proposed timeframe for a 3G spectrum
auction in the 2005 to 2006 timeframe. The spectrum frequency range for 3G has
not been fully resolved but will likely bear a close resemblance to the U.S.
allocation. Should the cost of acquiring such spectrum in the proposed auction
be greater than currently anticipated by the Company, this could create a
significant capital funding requirement for the Company.

Capital Resource Requirement

     The operation of the Company’s wireless communications network, the
marketing and distribution of its products and services, and the continued
evolution of network technology will continue to require significant capital
resources. The Company may not generate or have access to sufficient capital to
fund these expected future requirements.

Alleged Links Between Radio Frequency Emissions and Health Concerns

     Occasional media and other reports have highlighted alleged links between
radio frequency emissions from wireless handsets and various health concerns,
including cancer, and interference with various medical devices, including
hearing aids and pacemakers. While there are no definitive reports or studies
stating that radio frequency emissions are directly attributable to such health
issues, concerns over radio frequency emissions may discourage the use of
wireless handsets or expose the Company to potential litigation. It is also
possible that future regulatory actions may result in the
imposition of more restrictive standards on radio frequency emissions from
low powered devices such as wireless handsets. The Company is unable to predict
the nature or extent of any such potential restrictions.

 

33

Legislation on Wireless Handset Usage While Driving

     Certain provincial government bodies are considering legislation to
restrict or prohibit wireless handset usage while driving. Legislation banning
the use of hand-held phones, but permitting the use of hands-free devices, was
passed in Newfoundland and Labrador in late 2002, with implementation in April
2003. Legislation has been proposed in other jurisdictions to restrict or
prohibit the use of wireless handsets while driving motor vehicles. Some
studies have indicated that certain aspects of using wireless handsets while
driving may impair the attention of drivers in various circumstances, making
accidents more likely. If laws are passed prohibiting or restricting the use of
wireless handsets while driving, it could have the effect of reducing
subscriber usage. Additionally, concerns over the use of wireless handsets
while driving could potentially lead to litigation relating to accidents,
deaths or bodily injuries.

Dependence on Infrastructure and Handset Vendors

     The Company has relationships with a small number of key network
infrastructure and handset vendors. The Company does not have operational or
financial control over its key suppliers and has limited influence over how
they conduct their businesses. Failure of one of the Company’s network
infrastructure suppliers could delay programs to provide additional network
capacity or new capabilities and services across the business. Although the
Company has not been materially affected by supply problems in the past,
handsets and network infrastructure suppliers may, among other things, extend
delivery times, raise prices and limit supply due to their own shortages and
business requirements. If these suppliers fail to deliver products and
services on a timely basis, or fail to develop and deliver handsets that
satisfy the Company’s customers’ demands, this may have a negative impact on
the Company’s business, financial condition and results of operations.
Similarly, interruptions in the supply of equipment for the Company’s networks
could impact the quality of its service or impede network development and
expansion.

Disaster Recovery

     Rogers Wireless uses industry standard network and information technology
security, survivability and disaster recovery practices. Security breaches and
disasters may occur that are beyond the scope of Rogers Wireless’ ability to
recover without significant service interruption and commensurate revenue and
customer loss.

Wireless Local Number Portability in Canada

     Over the past several years, certain countries in Europe and Asia have
implemented wireless local number portability (“LNP”). In November 2003, as
mandated by the Federal government, the U.S. wireless industry began the
implementation of wireless LNP. Wireless LNP involves porting wireless phone
numbers to other wireless companies, but can also involve porting phone numbers
between wireline and wireless companies. The implementation of wireless LNP
systems and capabilities represents significant costs for the carriers in a
country to deploy. There has been no regulatory mandate for the implementation
of wireless LNP in Canada. However, if wireless LNP were to be required, this
would require carriers, including the Company, to incur implementation costs
which could be significant and once implemented could cause an increase in
churn among Canadian wireless carriers, including Rogers Wireless.

AWE Investment in the Company

     At December 31, 2003, the Company was 34.2% owned by AWE. AWE has
recently reported that it is exploring its strategic alternatives, including a
possible sale of its interest in the Company. Any decision by AWE or a
successor company to sell all or a portion of its shares in the Company is
subject to the terms of a shareholders agreement, as described above in the
“Intercompany and Related Party Transactions – Shareholders Agreement” section.

     The Company does not know AWE’s intentions with respect to its investment
in Rogers Wireless. Any change in the AWE relationship could result in changes
to, including termination of, the mobile wireless marketing, technology and
services agreement or roaming agreement, as described in the “Intercompany and
Related Party Transactions – AT&T Arrangements” section above.

 

34

Regulatory Risks

     As discussed in the “Overview of Government Regulation and Regulatory
Developments” section above, the Company’s operations are subject to government
regulation that could have adverse effects on its business.

Information Technology Systems

     The day-to-day operation of the Company’s business is highly dependent on
information technology systems. An inability to enhance its information
technology systems to accommodate additional customer growth and support new
products and services could have an adverse impact on its ability to acquire
new subscribers, manage subscriber churn, produce accurate and timely
subscriber bills, generate revenue growth and manage operating expenses, all of
which could adversely impact the Company’s financial results and financial
position.

     In
addition, the Company uses standard network and information
technology security, survivability and disaster recovery practices.
Approximately 1,400 of its employees and critical elements of the
Company’s network infrastructure and information technology
systems are located at its corporate office in Toronto. In the event
that the Company cannot access theses facilities, as a result of a
natural or manmade disaster or otherwise, its operations and
financial results could be adversely impacted.

 

35

RWCI

Five-Year Financial Summary

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Years ended December 31	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(thousands of dollars, except per share amounts)	 	2003	 	2002	 	2001	 	2000	 	1999
	 	 	 	
	 	
	 	
	 	
	 	

	Income Statement
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Postpaid
(voice and data) (1)
	 	$	1,911,073	 	 	$	1,628,095	 	 	$	1,464,423	 	 	$	1,350,587	 	 	$	1,171,471	 
	 	Prepaid
	 	 	91,255	 	 	 	91,151	 	 	 	71,068	 	 	 	42,530	 	 	 	23,849	 
	 	One-way messaging
	 	 	27,565	 	 	 	35,238	 	 	 	43,632	 	 	 	55,992	 	 	 	51,793	 
	 	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	 	Network
revenue (1)
	 	 	2,029,893	 	 	 	1,754,484	 	 	 	1,579,123	 	 	 	1,449,109	 	 	 	1,247,113	 
	 	Equipment
revenue (1)
	 	 	177,901	 	 	 	137,030	 	 	 	61,766	 	 	 	95,774	 	 	 	107,252	 
	 	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	 	Total
operating revenue  (2)
	 	 	2,207,794	 	 	 	1,891,514	 	 	 	1,640,889	 	 	 	1,544,883	 	 	 	1,354,365	 
	 	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	 	Operating
profit (3)
	 	 	716,236	 	 	 	516,681	 	 	 	401,261	 	 	 	400,550	 	 	 	412,477	 
	 	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	 	Net income (loss)
	 	$	137,841	 	 	$	(90,705	)	 	$	(224,692	)	 	$	(90,667	)	 	$	8,582	 
	 	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	Cash Flow
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Operating
cash flow from operations (4)
	 	$	521,957	 	 	$	310,641	 	 	$	211,773	 	 	$	262,870	 	 	$	318,960	 
	 	Additions
to PP&E (excluding
spectrum licence costs) (5)
	 	$	411,933	 	 	$	564,552	 	 	$	654,457	 	 	$	525,993	 	 	$	400,959	 
	Per Share
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Weighted average outstanding
Number of shares (000s)
	 	 	141,773	 	 	 	141,608	 	 	 	135,652	 	 	 	122,366	 	 	 	103,902	 
	 	Net income (loss) per share
	 	$	0.97	 	 	$	(0.64	)	 	$	(1.66	)	 	$	(0.74	)	 	$	0.08	 
	 	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	As at December 31	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(thousands of dollars)	 	2003	 	2002	 	2001	 	2000	 	1999
	 	 	 	
	 	
	 	
	 	
	 	

	Balance Sheet
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Total assets
	 	$	3,107,343	 	 	$	3,185,004	 	 	$	3,055,895	 	 	$	2,310,168	 	 	$	2,081,230	 
	 	Property, plant and equipment (net)
	 	 	2,299,919	 	 	 	2,371,133	 	 	 	2,252,328	 	 	 	1,972,110	 	 	 	1,778,545	 
	 	Long-term debt
	 	 	2,209,603	 	 	 	2,360,075	 	 	 	2,305,683	 	 	 	1,443,756	 	 	 	1,413,792	 
	 	Total Liabilities
	 	 	2,664,263	 	 	 	2,884,548	 	 	 	2,667,554	 	 	 	2,120,220	 	 	 	1,809,236	 
	 	Shareholders’ equity (deficiency)
	 	 	443,080	 	 	 	300,456	 	 	 	388,341	 	 	 	189,948	 	 	 	271,994	 

	(1)	 	As reclassified. See the “Recent
Accounting Developments — Revenue Recognition” section.

	 
	(2)	 	Previous years have been
reclassified to conform to the current presentation.
	 
	(3)	 	As previously defined. See
“Key Performance Indicators — Operating Profit
and Operating Profit Margin” section.
	 
	(4)	 	Operating cash flow from
operations before changes in non-cash operating items.
	 
	(5)	 	Spectrum licences for the deployment of next generation wireless services across Canada were acquired in February 2001 at a total cost of $396.8 million.

 

36

QUARTERLY SUMMARY 2003

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(in thousands of dollars, except per share amounts and subscriber information)	 	Dec. 31	 	Sep. 30	 	Jun. 30	 	Mar. 31
	 	 	 	
	 	
	 	
	 	

	Income Statement
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Operating revenue (1)(2)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Postpaid
(voice and data) (1)
	 	$	502,749	 	 	$	510,908	 	 	$	464,582	 	 	$	432,834	 
	 	Prepaid
	 	 	27,242	 	 	 	21,172	 	 	 	21,720	 	 	 	21,121	 
	 	One-way messaging
	 	 	6,442	 	 	 	6,815	 	 	 	6,876	 	 	 	7,432	 
	 	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	 	Network
revenue (1)
	 	 	536,433	 	 	 	538,895	 	 	 	493,178	 	 	 	461,387	 
	 	Equipment
revenue (1)
	 	 	53,166	 	 	 	49,720	 	 	 	39,284	 	 	 	35,731	 
	 	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	Total
operating revenue (1)
	 	 	589,599	 	 	 	588,615	 	 	 	532,462	 	 	 	497,118	 
	Operating
expenses 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Cost of equipment sales (1)
	 	 	128,762	 	 	 	94,610	 	 	 	83,761	 	 	 	73,638	 
	 	Sales
and marketing costs (1)
	 	 	111,912	 	 	 	85,233	 	 	 	82,007	 	 	 	82,846	 
	 	Operating,
general and administrative costs (1)
	 	 	182,004	 	 	 	186,477	 	 	 	184,148	 	 	 	184,824	 
	 	Management fees
	 	 	2,834	 	 	 	2,834	 	 	 	2,834	 	 	 	2,834	 
	 	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	Total operating expenses
	 	 	425,512	 	 	 	369,154	 	 	 	352,750	 	 	 	344,142	 
	 	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	Operating
profit (3)
	 	 	164,087	 	 	 	219,461	 	 	 	179,712	 	 	 	152,976	 
	Depreciation and amortization
	 	 	145,174	 	 	 	129,069	 	 	 	125,232	 	 	 	119,124	 
	 	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	Operating
income
	 	 	18,913	 	 	 	90,392	 	 	 	54,480	 	 	 	33,852	 
	Interest expense
	 	 	46,558	 	 	 	49,339	 	 	 	49,601	 	 	 	48,008	 
	Foreign
exchange (gain) loss
	 	 	(27,462	)	 	 	(2,008	)	 	 	(53,483	)	 	 	(52,289	)
	Other income (expense)
	 	 	—	 	 	 	851	 	 	 	134	 	 	 	(124	)
	Income taxes
	 	 	(1,534	)	 	 	1,171	 	 	 	1,378	 	 	 	1,378	 
	 	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	Net income
	 	$	1,351	 	 	$	42,741	 	 	$	57,118	 	 	$	36,631	 
	 	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	Net income per share – basic and diluted
	 	$	0.01	 	 	$	0.30	 	 	$	0.40	 	 	$	0.26	 
	Operating
profit margin (3)
	 	 	30.6	%	 	 	40.7	%	 	 	36.4	%	 	 	33.2	%
	Operating
cash flow from operations (4)
	 	$	119,366	 	 	$	169,516	 	 	$	128,969	 	 	$	104,106	 
	Additions
to PP&E
	 	 	119,068	 	 	 	116,379	 	 	 	98,793	 	 	 	77,693	 
	Property, plant and equipment
	 	 	2,299,919	 	 	 	2,302,200	 	 	 	2,311,014	 	 	 	2,333,578	 
	Total assets
	 	 	3,107,343	 	 	 	3,140,001	 	 	 	3,109,691	 	 	 	3,117,942	 
	Long-term debt
	 	 	2,209,603	 	 	 	2,199,321	 	 	 	2,309,708	 	 	 	2,362,282	 
	Shareholders’ equity
	 	$	443,080	 	 	$	439,013	 	 	$	395,421	 	 	$	337,596	 
	Wireless
subscribers (5)
	 	$	3,789,400	 	 	$	3,616,700	 	 	$	3,501,600	 	 	$	3,458,300	 
	One-way subscribers
	 	 	241,300	 	 	 	258,400	 	 	 	273,200	 	 	 	289,100	 

	(1)	 	As reclassified. See “Recent
Accounting Developments — Revenue Recognition” section.
	 
	(2)	 	Previous year quarterly comparison have been reclassified to conform to current presentation.
	 
	(3)	 	As previously defined. “See Key
Performance Indicators — Operating Profit and Operating Profit
Margin” section.
	 
	(4)	 	Operating cash flow from
operations before changes in non-cash operating items.
	 
	(5)	 	Wireless subscribers consist of Postpaid (voice and data) and prepaid. Previous year quarterly comparison have been reclassified to conform to current presentation.

 

37

QUARTERLY SUMMARY 2002

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	(in thousands of dollars, except per share amounts	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	and subscriber information)	 	Dec. 31	 	Sep. 30	 	Jun. 30	 	Mar. 31
	 	 	
	 	
	 	
	 	

	Income Statement
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Operating
revenue (1)(2)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Postpaid
(voice and data)(1)
	 	$	429,373	 	 	$	425,193	 	 	$	401,116	 	 	$	372,413	 
	Prepaid
	 	 	21,238	 	 	 	26,869	 	 	 	22,419	 	 	 	20,625	 
	One-way messaging
	 	 	8,304	 	 	 	8,851	 	 	 	9,016	 	 	 	9,067	 
	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	Network
revenue (1)
	 	 	458,915	 	 	 	460,913	 	 	 	432,551	 	 	 	402,105	 
	Equipment revenue (1)
	 	 	44,086	 	 	 	51,958	 	 	 	28,467	 	 	 	12,519	 
	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	Total operating revenue (1)
	 	 	503,001	 	 	 	512,871	 	 	 	461,018	 	 	 	414,624	 
	Operating expenses (1)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Cost of equipment sales (1)
	 	 	95,833	 	 	 	82,266	 	 	 	68,298	 	 	 	50,397	 
	Sales and marketing costs (1)
	 	 	103,354	 	 	 	85,712	 	 	 	72,994	 	 	 	66,824	 
	Operating, general and administrative costs (1)
	 	 	180,665	 	 	 	183,987	 	 	 	186,945	 	 	 	186,552	 
	Management fees
	 	 	2,751	 	 	 	2,752	 	 	 	2,751	 	 	 	2,752	 
	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	Total operating expenses
	 	 	382,603	 	 	 	354,717	 	 	 	330,988	 	 	 	306,525	 
	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	Operating
profit (3)
	 	$	120,398	 	 	$	158,154	 	 	$	130,030	 	 	$	108,099	 
	Change in estimate of sales tax and CRTC
contribution liabilities
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(12,331	)
	Depreciation and amortization
	 	 	120,157	 	 	 	116,646	 	 	 	110,802	 	 	 	109,528	 
	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	Operating
income
	 	 	241	 	 	 	41,508	 	 	 	19,228	 	 	 	10,902	 
	Interest expense
	 	 	49,647	 	 	 	50,105	 	 	 	48,008	 	 	 	47,390	 
	Foreign
exchange (gain) loss
	 	 	(3,095	)	 	 	27,182	 	 	 	(30,938	)	 	 	441	 
	Gain on repayment of long-term debt
	 	 	(8,238	)	 	 	(22,759	)	 	 	—	 	 	 	—	 
	Other income
	 	 	(335	)	 	 	(4	)	 	 	(1	)	 	 	(77	)
	Income taxes
	 	 	1,129	 	 	 	1,127	 	 	 	1,426	 	 	 	1,576	 
	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	Net income (loss) for the quarter
	 	$	(38,867	)	 	$	(14,143	)	 	$	733	 	 	$	(38,428	)
	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	Net income (loss) per share - basic and
diluted
	 	$	(0.27	)	 	$	(0.10	)	 	$	—	 	 	$	(0.27	)
	Operating
profit margin (3)
	 	 	26.2	%	 	 	34.3	%	 	 	30.1	%	 	 	26.9	%
	Operating
cash flow from operations (4)
	 	$	70,229	 	 	$	106,796	 	 	$	81,309	 	 	$	52,307	 
	Additions
to PP&E
	 	 	188,305	 	 	 	126,016	 	 	 	149,036	 	 	 	101,195	 
	Property, plant and equipment
	 	 	2,371,133	 	 	 	2,299,109	 	 	 	2,287,385	 	 	 	2,246,546	 
	Total assets
	 	 	3,185,004	 	 	 	3,059,756	 	 	 	3,052,364	 	 	 	3,053,932	 
	Long-term debt
	 	 	2,360,075	 	 	 	2,254,038	 	 	 	2,358,443	 	 	 	2,267,917	 
	Shareholders’ equity
	 	$	300,456	 	 	$	338,815	 	 	$	352,385	 	 	$	351,301	 
	Wireless
subscribers (5)
	 	 	3,408,000	 	 	 	3,256,900	 	 	 	3,164,500	 	 	 	3,097,100	 
	One-way subscribers
	 	 	302,300	 	 	 	316,600	 	 	 	333,300	 	 	 	348,800	 

	(1)	 	As reclassified. See “Recent
Accounting Developments – Revenue Recognition” section.
	 
	(2)	 	Previous year quarterly comparison have been reclassified to conform to current presentation.
	 
	(3)	 	As previously defined. See
“Key Performance Indicators — Operating Profit and
Operating Profit Margin” section.
	 
	(4)	 	Operating cash flow from
operations before changes in non-cash operating items.
	 
	(5)	 	Wireless subscribers consist of Postpaid (voice and data) and prepaid. Previous year quarterly comparison have been reclassified to conform to current
presentation.

 

38

ADDITIONAL INFORMATION

     Additional information relating to the Company, including a discussion of
the most recent quarterly results, may be found on SEDAR at www.sedar.com.

 

	 	 	 
	 	 	
Consolidated Financial Statements of
	 	 	 
	 	 	
ROGERS WIRELESS
	 	 	
COMMUNICATIONS INC.
	 	 	 
	 	 	
Years ended December 31, 2003 and 2002

 

 

ROGERS WIRELESS COMMUNICATIONS INC.

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING

December 31, 2003

The accompanying consolidated
financial statements of Rogers Wireless Communications
Inc. and its subsidiaries and all the information in Management’s Discussion
and Analysis are the responsibility of management and have been approved by the
Board of Directors.

The financial statements have been prepared by management in accordance with
Canadian generally accepted accounting principles. The financial statements
include certain amounts that are based on the best estimates and judgements of
management, and in their opinion present fairly, in all material respects,
Rogers Wireless Communications Inc.’s financial position, results of operations and cash
flows. Management has prepared the financial information presented elsewhere
in Management’s Discussion and Analysis and has ensured that it is consistent
with the financial statements.

Management of Rogers Wireless Communications Inc., in furtherance of the integrity of
the financial statements, has developed and maintains a system of internal
controls, which is supported by the internal audit function. Management
believes the internal controls provide reasonable assurance that transactions
are properly authorized and recorded, financial records are reliable and form a
proper basis for the preparation of financial statements and that Rogers
Wireless Communications Inc.’s assets are properly accounted for and safeguarded.

The Board of Directors is responsible for ensuring management fulfils its
responsibilities for financial reporting and is ultimately responsible for
reviewing and approving the financial statements. The Board carries out this
responsibility through its Audit Committee.

The Audit Committee meets periodically with management, as well as the internal
and external auditors, to discuss internal controls over the financial
reporting process, auditing matters and financial reporting issues; to satisfy
itself that each party is properly discharging its responsibilities; and, to
review Management’s Discussion and Analysis, the financial statements and the
external auditors’ report. The Audit Committee reports its findings to the
Board for consideration when approving the financial statements for issuance to
the shareholders. The Committee also considers, for review by the Board and
approval by the shareholders, the engagement or re-appointment of the external
auditors.

The financial statements have been audited by KPMG LLP, the external auditors,
in accordance with Canadian generally accepted auditing standards on behalf of
the shareholders. KPMG LLP has full and free access to the Audit Committee.

	 	 	 
	/s/ Nadir H. Mohamed
 
Nadir H. Mohamed, CA	 	
/s/ John R. Gossling
 
John R. Gossling, CA
	President and Chief Executive Officer	 	
Senior Vice President, Finance and Chief
	 	 	
Financial Officer

 

 

AUDITORS’ REPORT TO THE SHAREHOLDERS

We have audited the consolidated balance sheets of Rogers Wireless
Communications Inc. as at December 31, 2003 and 2002 and the consolidated
statements of income, deficit and cash flows for the years then ended. These
financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with Canadian generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.

In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company as at December 31,
2003 and 2002 and the results of its operations and its cash flows for the
years then ended in accordance with Canadian generally accepted accounting
principles.

/s/ KPMG LLP

Chartered Accountants

Toronto, Canada

January 28, 2004, except as to Note 19, which is as of
November 19, 2004.

 

 

ROGERS WIRELESS COMMUNICATIONS INC.

Consolidated Balance Sheets

(In thousands of dollars)

As at December 31, 2003 and 2002

	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	2003	2002
	 	 	 	 	
	

	Assets
	 	 	 	 	 	 	 	 
	Current
assets
	 	 	 	 	 	 	 	 
	
Cash and cash equivalents
	 	 	$	—	 	$	10,068	 
	Accounts

receivable, net of allowance
	 	 	 	325,210	 	 	289,907	 
	Other
current assets (note 6)
	 	 	 	38,619	 	 	32,977	 
	 
	 	 	 	
	 	 	
	 
	 
	 	 	 	363,829	 	 	332,952	 
	Property,

plant and equipment (note 3)
	 	 	 	2,299,919	 	 	2,371,133	 
	
Goodwill
	 	 	 	7,058	 	 	7,058	 
	Spectrum
licences (note 4)
	 	 	 	396,824	 	 	419,294	 
	Deferred
charges (note 5)
	 	 	 	38,163	 	 	51,145	 
	Other
long-term assets (note 6)
	 	 	 	1,550	 	 	3,422	 
	 
	 	 	 	
	 	 	
	 
	 
	 	 	$	3,107,343	 	$	3,185,004	 
	 
	 	 	 	
	 	 	
	 
	
Liabilities and Shareholders’ Equity
	 	 	 	 	 	 	 	 
	Liabilities:
	 	 	 	 	 	 	 	 
	Current
liabilities
	 	 	 	 	 	 	 	 
	Bank advances,
 arising from outstanding cheques
	 	 	$	4,233	 	$	—	 
	Accounts payable and
 accrued liabilities
	 	 	 	396,652	 	 	450,510	 
	
Current portion of long-term debt (note 8)
	 	 	 	2,378	 	 	5,163	 
	
Due to parent and affiliated companies (note 14(a))
	 	 	 	47	 	 	4,041	 
	Unearned revenue
	 	 	 	34,503	 	 	48,075	 
	 
	 	 	 	
	 	 	
	 
	 	 
	 	 	 	437,813	 	 	507,789	 
	Long-term debt (note 8)
	 	 	 	2,207,225	 	 	2,354,912	 
	Deferred gain (note 8(h))
	 	 	 	19,225	 	 	21,847	 
	 
	 	 	 	
	 	 	
	 
	 
	 	 	 	2,664,263	 	 	2,884,548	 
	Shareholders’ equity (note 9)
	 	 	 	443,080	 	 	300,456	 
	 
	 	 	 	
	 	 	
	 
	 
	 	 	$	3,107,343	 	$	3,185,004	 
	 
	 	 	 	
	 	 	
	 

Commitments (note 16)

Contingent liabilities (note 17)

Canadian and United States accounting policy differences (note 18)

Subsequent events (note 19)

See accompanying notes to consolidated financial statements.

On behalf of the Board:

	 	 	 
	 
	 	
Director
	 
	 	
Director

1

 

ROGERS WIRELESS COMMUNICATIONS INC.

Consolidated Statements of Income

(In thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	 	 	 	 	 	 	 	 	 
	 	 	2003	 	2002
	 	 	
	 	

	Operating
revenue (notes 10 and 19)
	 	$	2,207,794	 	 	$	1,891,514	 
	Cost
of equipment sales  (note 19)
	 	 	380,771	 	 	 	296,794	 
	Sales and marketing expenses  (note 19)
	 	 	361,998	 	 	 	328,884	 
	Operating, general and administrative expenses (note 19)
	 	 	737,453	 	 	 	738,149	 
	Management fees (note 14(b)(i))
	 	 	11,336	 	 	 	11,006	 
	Change in estimates of sales tax and CRTC
contribution liabilities (note 11)
	 	 	—	 	 	 	(12,331	)
	Depreciation and amortization
	 	 	518,599	 	 	 	457,133	 
	 
	 	 	
	 	 	 	
	 
	Operating income
	 	 	197,637	 	 	 	71,879	 
	Interest expense on long-term debt
	 	 	193,506	 	 	 	195,150	 
	 
	 	 	
	 	 	 	
	 
	 
	 	 	4,131	 	 	 	(123,271	)
	Foreign exchange gain (note 2(g))
	 	 	135,242	 	 	 	6,410	 
	Gain on repayment of long-term debt (note 8(h))
	 	 	—	 	 	 	30,997	 
	Investment and other income
	 	 	861	 	 	 	417	 
	 
	 	 	
	 	 	 	
	 
	Income (loss) before income taxes
	 	 	140,234	 	 	 	(85,447	)
	Income taxes (note 12)
	 	 	2,393	 	 	 	5,258	 
	 
	 	 	
	 	 	 	
	 
	Net income (loss) for the year
	 	$	137,841	 	 	$	(90,705	)
	 
	 	 	
	 	 	 	
	 
	Basic and diluted earnings (loss)
per share (note 13)
	 	$	0.97	 	 	$	(0.64	)
	 
	 	 	
	 	 	 	
	 

See accompanying notes to consolidated financial statements.

2

 

ROGERS WIRELESS COMMUNICATIONS INC.

Consolidated Statements of Deficit

(In thousands of dollars)

Years ended December 31, 2003 and 2002

	 	 	 	 	 	 	 	 	 
	 	 	2003	 	2002
	 	 	
	 	

	Deficit, beginning of year
	 	$	(1,582,730	)	 	$	(1,492,025	)
	Net income (loss) for the year
	 	 	137,841	 	 	 	(90,705	)
	 
	 	 	
	 	 	 	
	 
	Deficit, end of year
	 	$	(1,444,889	)	 	$	(1,582,730	)
	 
	 	 	
	 	 	 	
	 

See accompanying notes to consolidated financial statements.

3

 

ROGERS WIRELESS COMMUNICATIONS INC.

Consolidated Statements of Cash Flows

(In thousands of dollars)

Years ended December 31, 2003 and 2002

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	2003	 	2002
	 	 	 	 	
	 	

	Cash provided by (used in):
	 	 	 	 	 	 	 	 
	Operating activities:
	 	 	 	 	 	 	 	 
	 	Net income (loss) for the year
	 	$	137,841	 	 	$	(90,705	)
	 	Adjustments to reconcile net income (loss) to net
cash flows from operating activities:
	 	 	 	 	 	 	 	 
	 	 	Depreciation and amortization
	 	 	518,599	 	 	 	457,133	 
	 	 	Unrealized foreign exchange gain
	 	 	(134,483	)	 	 	(5,633	)
	 	 	Gain on repayment of long-term debt
	 	 	—	 	 	 	(30,997	)
	 	 	Change in estimate of sales tax liability
	 	 	—	 	 	 	(19,157	)
	 	 
	 	 	
	 	 	 	
	 
	 
	 	 	521,957	 	 	 	310,641	 
	 	Change
in non-cash operating items (notes 7(a) and note 19)
	 	 	(25,440	)	 	 	53,664	 
	 	 
	 	 	
	 	 	 	
	 
	 
	 	 	496,517	 	 	 	364,305	 
	 	 
	 	 	
	 	 	 	
	 
	Financing activities:
	 	 	 	 	 	 	 	 
	 	Issue of long-term debt
	 	 	604,000	 	 	 	427,000	 
	 	Repayment of long-term debt
	 	 	(619,989	)	 	 	(377,093	)
	 	Proceeds on termination of cross-currency
interest rate exchange agreements (note 8(h))
	 	 	—	 	 	 	64,353	 
	 	Issue of capital stock
	 	 	4,783	 	 	 	2,820	 
	 	 
	 	 	
	 	 	 	
	 
	 
	 	 	(11,206	)	 	 	117,080	 
	 	 
	 	 	
	 	 	 	
	 
	Investing activities:
	 	 	 	 	 	 	 	 
	 	Additions
to property, plant and equipment (note 19)
	 	 	(499,612	)	 	 	(465,949	)
	 	 
	 	 	
	 	 	 	
	 
	Increase (decrease) in cash and cash equivalents
	 	 	(14,301	)	 	 	15,436	 
	Cash and cash equivalents (deficiency), beginning of year
	 	 	10,068	 	 	 	(5,368	)
	 	 
	 	 	
	 	 	 	
	 
	Cash and cash equivalents (deficiency), end of year
	 	$	(4,233	)	 	$	10,068	 
	 	 
	 	 	
	 	 	 	
	 

Cash and cash equivalents are defined as cash and short-term deposits, which
have an original maturity of less than 90 days, less bank advances.

For supplemental cash flow information, see note 7(b).

See accompanying notes to consolidated financial statements.

4

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	1.	 	Nature of business:

	 	 	Rogers Wireless Communications Inc. is a public company, 55.8% owned by
Rogers Communications Inc. (“RCI”) and 34.2% (2002 — 34.3%) owned by AT&T
Wireless Services, Inc. (“AWE”). Rogers Wireless Communications Inc. and
its subsidiary companies are collectively referred to herein as the
“Company”.

	 	 	The Company operates in a single business segment as a provider of wireless
voice, data and messaging services nationwide in Canada, under licences
issued by Industry Canada.

	2.	 	Significant accounting policies:

	 	(a)	 	Consolidation:

	 		 	The consolidated financial statements are prepared in accordance with
Canadian generally accepted accounting principles (“GAAP”) and differ
in certain significant respects from U.S. GAAP as described in note 18.
The consolidated financial statements include the accounts of Rogers
Wireless Communications Inc. and its subsidiary companies.
Intercompany transactions and balances are eliminated on consolidation.

	 	(b)	 	Property, plant and equipment:

	 		 	Property, plant and equipment (“PP&E”) are recorded at purchase cost.
During construction of new assets, direct costs plus a portion of
applicable overhead costs are capitalized. Repairs and maintenance
expenditures are charged to operating expense as incurred.

	 	(c)	 	Depreciation:

	 		 	PP&E are depreciated annually over their estimated useful lives as
follows:

	 	 	 	 	 
	Asset	 	Basis	 	Rate
	
	 	
	 	

	Buildings	 	
Diminishing balance
	 	5%
	Network equipment	 	
Straight line
	 	6-2/3% to 25%
	Network radio base station equipment	 	
Straight line
	 	12-1/2% to 14-1/3%
	Computer equipment and software	 	
Straight line
	 	14-1/3% to 33-1/3%
	Furniture, fixtures and office equipment	 	
Diminishing balance
	 	20%
	Leasehold improvements	 	
Straight line
	 	Over term of lease
	Other equipment	 	
Mainly diminishing balance
	 	30% to 33-1/3%

5

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	2.	 	Significant accounting policies (continued):

	 	(d)	 	Asset retirement obligations:

	 		 	Effective January 1, 2003, the Company adopted retroactively The
Canadian Institute of Chartered Accountants’ (“CICA”) Handbook Section
3110, “Asset Retirement Obligations”, which harmonizes Canadian GAAP
with U.S. Financial Accounting Standards Board’s (“FASB”) Statement No.
143, “Accounting for Asset Retirement Obligations”. The standard
provides guidance for the recognition, measurement and disclosure of
liabilities for asset retirement obligations and the associated asset
retirement costs. The standard applies to legal obligations associated
with the retirement of a tangible long-lived asset that result from
acquisition, construction, development or normal operations.

	 		 	The standard requires the Company to record the fair value of a
liability for an asset retirement obligation in the year in which it is
incurred and when a reasonable estimate of fair value can be made. The
standard describes the fair value of a liability for an asset
retirement obligation as the amount at which that liability could be
settled in a current transaction between willing parties, that is,
other than in a forced or liquidation transaction. The Company is
subsequently required to allocate that asset retirement cost to expense
using a systematic and rational method over the asset’s useful life.

	 		 	The adoption of this standard had no material impact on the Company’s
financial position, results of operations or cash flows.

	 	(e)	 	Long-lived assets:

	 		 	Effective January 1, 2003, the Company adopted CICA Handbook Section
3063, “Impairment of Long-Lived Assets”. Long-lived assets, including
PP&E and intangible assets with finite useful lives, are amortized over
their useful lives. The Company reviews long-lived assets for
impairment annually or more frequently if events or changes in
circumstances indicate that the carrying amount may not be recoverable.
If the sum of the undiscounted future cash flows expected to result
from the use and eventual disposition of a group of assets is less than
its carrying amount, it is considered to be impaired. An impairment
loss is measured as the amount by which the carrying amount of the
group of assets exceeds its fair value. At December 31, 2003, no such
impairment had occurred.

6

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	2.	 	Significant accounting policies (continued):

	 		 	For the year ended December 31, 2002, the Company’s policy was to
review the recoverability of PP&E annually or
more frequently if events or circumstances indicated that the carrying
amount may not be recoverable. Recoverability was measured by
comparing the carrying amounts of a group of assets to future
undiscounted net cash flows expected to be generated by that group of
assets. As at December 31, 2002, no impairment in the carrying amount
had occurred. Intangible assets with definite lives were tested for
impairment by comparing their book values with the undiscounted cash
flow expected to be received from their use. At December 31, 2002, no
impairment had occurred.

	 	(f)	 	Goodwill and other intangible assets:

	 	(i)	 	Goodwill:

	 		 	Goodwill is the residual amount that results when the purchase price
of an acquired business exceeds the sum of the amounts allocated to
the tangible and intangible assets acquired, less liabilities
assumed, based on their fair values. When the Company enters into a
business combination, the purchase method of accounting is used.
Goodwill is assigned as of the date of the business combination to
reporting units that are expected to benefit from the business
combination.

	 		 	Goodwill is not amortized but instead is tested for impairment
annually or more frequently if events or changes in circumstances
indicate that the asset might be impaired. The impairment test is
carried out in two steps. In the first step, the carrying amount of
the reporting unit, including goodwill, is compared with its fair
value. When the fair value of the reporting unit exceeds its
carrying amount, goodwill of the reporting unit is not considered to
be impaired and the second step of the impairment test is
unnecessary. The second step is carried out when the carrying
amount of a reporting unit exceeds its fair value, in which case,
the implied fair value of the reporting unit’s goodwill, determined
in the same manner as the value of goodwill is determined in a
business combination, is compared with its carrying amount to
measure the amount of the impairment loss, if any.

7

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	2.	 	Significant accounting policies (continued):

	 	(ii)	 	Intangible assets:

	 		 	Intangible assets acquired in a business combination are recorded at
their fair values and all intangible assets are tested for
impairment annually or more frequently when events or changes in
circumstances indicate that their carrying amounts may not be
recoverable. Intangible assets with determinable lives are
amortized over their estimated useful lives and are tested for
impairment as described in note 2(e). Intangible assets having an
indefinite life, such as spectrum licences, are not amortized but
instead are tested for impairment on an annual or more frequent
basis by comparing their fair value with book value. An impairment
loss on indefinite life intangible assets is recognized when the
carrying amount of the asset exceeds its fair value.

	 		 	The Company has tested goodwill and intangible assets with indefinite
lives for impairment at December 31, 2003 and 2002 and determined no
impairment in the carrying value of these assets existed.

	 	(g)	 	Foreign currency translation:

	 		 	Long-term debt denominated in U.S. dollars is translated into Canadian
dollars at the year-end rate of exchange. The effect of cross-currency
interest rate exchange agreements is shown separately in note 8.
Exchange gains or losses on translating long-term debt are recognized
in the consolidated statements of income. In 2003, foreign exchange
gains related to the translation of long-term debt totalled $134.5
million (2002 — $5.6 million).

	 	(h)	 	Deferred charges:

	 		 	The costs of obtaining bank and other debt financing are deferred and
amortized on a straight-line basis over the effective life of the debt
to which they relate.

	 		 	During the development and pre-operating phases of new products and
businesses, related incremental costs are deferred and amortized on a
straight-line basis over two years.

8

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	2.	 	Significant accounting policies (continued):

	 	(i)	 	Inventories:

	 		 	Inventories, consisting principally of wireless handsets and
accessories, are valued at the lower of cost on a first-in, first-out
basis, and net realizable value.

	 	(j)	 	Pension benefits:

	 		 	Substantially all of the Company’s employees are provided defined
benefit pensions through the RCI Pension Plan. The Company accounts
for its participation in the RCI Pension Plan as a defined contribution
plan and, accordingly, pension expense for the year is recognized for
the contributions required to be made to the RCI Pension Plan during
the year. For the year ended December 31, 2003, contributions of $3.6
million (2002 — nil) were required, resulting in pension expense of the
same amount. The Company does not provide its employees with
post-retirement benefits other than pensions.

	 		 	The Company also provides unfunded supplemental pension benefits to certain
executives. As at December 31, 2003, the accrued benefit obligation
relating to these supplemental plans amounted to approximately $1.4
million and the related expense for 2003 was $0.8 million (2002 — nil).

	 	(k)	 	Income taxes:

	 		 	Future income tax assets and liabilities are recognized for the future
income tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities
and their respective tax bases. Future income tax assets and
liabilities are measured using enacted or substantively enacted tax
rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. A
valuation allowance is recorded against any future income tax asset if
it is more likely than not that the asset will not be realized. Income
tax expense is the sum of the Company’s provision for current income
taxes and the difference between opening and ending balances of future
income tax assets and liabilities.

9

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	2.	 	Significant accounting policies (continued):

	 	(l)	 	Financial instruments:

	 		 	The Company uses derivative financial instruments to manage risks from
fluctuations in exchange rates and interest rates. These instruments
include cross-currency interest rate exchange agreements, interest rate
exchange agreements, foreign exchange forward contracts and, from time
to time, foreign exchange option agreements. All such instruments are
used only for risk management purposes and are designated as hedges of
specific debt instruments. The Company accounts for these financial
instruments as hedges and, as a result, the carrying values of the
financial instruments are not adjusted to reflect their current fair
values. The net receipts or payments arising from financial
instruments relating to interest are recognized in interest expense on
an accrual basis. Upon redesignation or amendment of a derivative
financial instrument, the carrying value of the instrument is adjusted
to fair value. If the related debt instrument that was hedged has been
repaid, then the gain or loss is recorded as a component of the gain or
loss on repayment of the debt. Otherwise, the gain or loss is deferred
and amortized over the remaining life of the original debt instrument.

	 		 	These instruments, which have been entered into by the Company to hedge
exposure to interest rate and foreign exchange risk, are periodically
examined by the Company to ensure that the instruments are highly
effective at reducing or modifying interest rate or foreign exchange
risk associated with the hedged item.

	 	(m)	 	Revenue recognition:

	 		 	The Company earns revenue from subscribers for monthly fees for
wireless services and equipment, the use of wireless voice or data
services in excess of that included with the monthly fee, long-distance
calls, calls initiated or received outside of Canada by the Company’s
subscribers, referred to as “roaming”, calls initiated or received on
the Company’s network by other carriers’ subscribers, and fees for
optional services, such as voicemail.

	 		 	Monthly fees are recognized as revenue on a pro rata basis over the
month. Wireless airtime, long-distance, roaming and optional services
fees are recognized as revenue as the services are provided.

10

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	2.	 	Significant accounting policies (continued):

	 		 	Revenue from the sale of equipment is recorded when the equipment is
delivered and accepted by the independent dealer or customer.

	 		 	Unearned revenue represents amounts received from subscribers related
to services to be provided in future periods, and includes subscriber
deposits.

	 	(n)	 	Subscriber acquisition costs:

	 		 	Sales and marketing costs related to the acquisition of new
subscribers, including commission and equipment subsidies, are expensed
as incurred.

	 	(o)	 	Stock-based compensation and other stock-based payments:

	 		 	The Company has a stock option plan for employees and directors. All
stock options issued under this plan have an exercise price equal to
the fair market value of the underlying Class B Restricted Voting
Shares on the date of grant. As a result, the Company records no
compensation expense on the grant of options to the Company’s employees
under the plan. The Company discloses the pro forma effect of
accounting for these awards under the fair value-based method (note
9(d)).

	 		 	The Company accounts for all stock-based payments to non-employees and
employee awards that are direct awards of stock, call for settlement in
cash or other assets, or are stock appreciation rights that call for
settlement by the issuance of equity instruments using the fair
value-based method.

	 		 	The Company also has an employee share purchase plan. Under the terms
of the plan, participating employees with the Company at the end of the
term of the plan, which is usually one year, receive a bonus based on a
percentage of their purchase. Compensation expense is recognized in
connection with the employee share purchase plan to the extent of the
bonus provided to employees from the market price of the Class B
Restricted Voting shares on the date of issue. Consideration paid by
employees on the exercise of stock options or the purchase of shares is
recorded as share capital and contributed surplus. The stock option
plan and share purchase plan are more fully described in notes 9(d) and
(e).

11

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	2.	 	Significant accounting policies (continued):

	 		 	The Company has a Directors’ deferred share unit plan, under which
directors of the Company are entitled to elect to receive their
remuneration in deferred share units. Upon departure as a director,
these deferred share units will be redeemed by the Company at the then
current Class B Restricted Voting Shares’ market price. Compensation
expense is recognized in the amount of the directors’ remuneration as
their services are rendered. The related accrued liability is adjusted
to the market price of the Class B Restricted Voting Shares at each
balance sheet date and the related adjustment is recorded in operating
income. At December 31, 2003, a total of 17,932 (2002 — 13,273)
deferred share units were outstanding.

	 	(p)	 	Earnings per share:

	 		 	The Company uses the treasury stock method for calculating diluted
earnings per share. The diluted earnings per share calculation
considers the impact of employee stock options, as described in note
13.

	 	(q)	 	Guarantees:

	 		 	Effective on January 1, 2003, the Company adopted CICA Accounting
Guideline 14, “Disclosure of Guarantees” (“AcG-14”), which requires a
guarantor to disclose significant information about certain types of
guarantees that it has provided, including certain types of indemnities
and indirect guarantees of indebtedness to others, without regard to
the likelihood of whether it will have to make any payments under the
guarantees. The disclosure required by AcG-14 is in addition to the
existing disclosure required for contingencies.

	 		 	The Company has no guarantees requiring disclosure.

	 	(r)	 	Use of estimates:

	 		 	The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenue and expenses during the year. Actual results could differ from
those estimates.

12

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	2.	 	Significant accounting policies (continued):

	 		 	Key areas of estimation where management has made difficult, complex or
subjective judgements, often as a result of matters that are inherently
uncertain, are the provision for bad debts, the ability to use income tax loss carryforwards and other future tax assets,
capitalization of labour and overhead, useful lives of depreciable
assets, asset retirement obligations, and the recoverability of PP&E,
goodwill and intangible assets. Significant changes in the
assumptions, including those with respect to future business plans and
cash flows, could change the recorded amounts by a material amount.

	 	(s)	 	Recent Canadian accounting pronouncements:

	 	(i)	 	Revenue arrangements with multiple deliverables:

	 		 	In December 2003, the Emerging Issues Committee issued Abstract 142,
“Revenue Arrangements with Multiple Deliverables”, which the Company
will apply prospectively beginning January 1, 2004. This Abstract
is consistent with the U.S. standard with the same title, and
addresses both when and how an arrangement involving multiple
deliverables should be divided into separate units of accounting and
how the arrangement’s consideration should be allocated among
separate units. See note 19(a) for the impact of adoption of this standard.

	 	(ii)	 	Hedging relationships:

	 		 	In November 2001, the CICA issued Accounting Guideline 13, “Hedging
Relationships” (“AcG-13”), and in November 2002 the CICA amended the
effective date of the guideline. AcG-13 establishes new criteria
for hedge accounting and will apply to all hedging relationships in
effect on or after January 1, 2004. Effective January 1, 2004, the
Company will re-assess all hedging relationships to determine
whether the criteria are met or not and will apply the new guidance
on a prospective basis. To qualify for hedge accounting, the
hedging relationship must be appropriately documented at the
inception of the hedge and there must be reasonable assurance, both
at the inception and throughout the term of the hedge, that the
hedging relationship will be effective. Effectiveness requires a
high correlation of changes in fair values or cash flows between the
hedged item and the hedging item. The Company is currently
determining the impact of the guideline.

13

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	2.	 	Significant accounting policies (continued):

	 	(iii)	 	Stock-based compensation:

	 		 	In 2003, the CICA amended Handbook Section 3870, “Stock-based
Compensation and other Stock-based Payments”, to require the
recording of compensation expense on the granting of all stock-based
compensation awards, including stock options to employees,
calculated using the fair-value method. The Company will adopt this
standard on January 1, 2004, retroactively without restatement.
If the Company were to use the Black-Scholes Option Pricing model for
calculating the fair value of stock-based compensation, the Company
would record a charge to opening retained earnings on
January 1, 2004 of $2.3 million related to stock options granted on
or after January 1, 2002 (note 9(d)).

	 	(iv)	 	Generally accepted accounting principles:

	 		 	In June 2003, the CICA released Handbook Section 1100, “Generally
Accepted Accounting Principles”. This section establishes standards
for financial reporting in accordance with Canadian GAAP, and
describes what constitutes Canadian GAAP and its sources. This
section also provides guidance on sources to consult when selecting
accounting policies and determining appropriate disclosures when a
matter is not dealt with explicitly in the primary sources of GAAP.
The new standard is effective on a prospective basis beginning
January 1, 2004. See note 19(a) for the impact of adoption of this section on the consolidated financial statements.

14

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	3.	 	Property, plant and equipment:

	 	 	Details of PP&E are as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	2003	 	2002
	 	 	
	 	

	 	 	 	 	 	 	Net book	 	 	 	 	 	Net book
	 	 	Cost	 	value	 	Cost	 	value
	 	 	
	 	
	 	
	 	

	Land and buildings
	 	$	200,395	 	 	$	167,519	 	 	$	187,992	 	 	$	162,013	 
	Network equipment
	 	 	2,638,090	 	 	 	1,369,704	 	 	 	2,427,517	 	 	 	1,363,028	 
	Network radio
base station equipment
	 	 	1,382,138	 	 	 	465,172	 	 	 	1,354,290	 	 	 	489,992	 
	Computer equipment
and software
	 	 	706,998	 	 	 	251,445	 	 	 	653,919	 	 	 	301,700	 
	Furniture, fixtures
and office equipment
	 	 	61,377	 	 	 	18,137	 	 	 	61,200	 	 	 	22,236	 
	Leasehold improvements
	 	 	37,588	 	 	 	22,752	 	 	 	38,884	 	 	 	26,808	 
	Other equipment
	 	 	13,387	 	 	 	5,190	 	 	 	17,929	 	 	 	5,356	 
	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	 
	 	$	5,039,973	 	 	$	2,299,919	 	 	$	4,741,731	 	 	$	2,371,133	 
	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 

Depreciation expense for 2003 amounted to $483.1 million (2002 — $445.8
million).

PP&E not yet in service and therefore not depreciated at December 31, 2003
amounted to $102.6 million (2002 — $248.0 million).

15

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	4.	 	Spectrum and brand licences:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	2003	 	2002
	 	 	
	 	

	 	 	 	 	 	 	Net book	 	 	 	 	 	Net book
	 	 	Cost	 	value	 	Cost	 	value
	 	 	
	 	
	 	
	 	

	Spectrum licences
	 	$	396,824	 	 	$	396,824	 	 	$	396,824	 	 	$	396,824	 
	AT&T brand licence,
less accumulated
amortization of $37,800 (2002 - $15,330)
	 	 	37,800	 	 	 	—	 	 	 	37,800	 	 	 	22,470	 
	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	 
	 	$	434,624	 	 	$	396,824	 	 	$	434,624	 	 	$	419,294	 
	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 

	 	 	The Company holds 23 spectrum licences providing for the use of 10
megahertz (“MHz”) or 20 MHz of radio frequency spectrum, depending on the
region in Canada, in the 1.9 gigahertz (“GHz”) band. The licences were
purchased in a spectrum auction conducted by Industry Canada in February
2001 at an aggregate cost of $396.8 million, including costs of
acquisition, and are renewable in 2011. The Company has determined that
these licences have indefinite lives for accounting purposes.

	 	 	The AT&T brand licence was acquired in 1996 at an aggregate cost of $37.8
million, which provided the Company with, among other things, the right to
use the AT&T brand name. The cost of the brand licence was deferred and
amortized on a straight-line basis to expense over the 15-year term of the
brand licence agreement. In December 2003, the Company announced that it
would terminate its brand licence agreement in early 2004 and change its
brand name to exclude the AT&T brand. Consequently, the Company determined
the useful life of the brand licence had ended on December 31,
2003 and accordingly, fully amortized the remaining net book value of $20.0 million.
Amortization expense of the brand licence cost for 2003 was $22.5 million
(2002 — $2.5 million).

	5.	 	Deferred charges:

	 	 	 	 	 	 	 	 	 
	 	 	2003	 	2002
	 	 	
	 	

	Financing costs
	 	$	27,070	 	 	$	32,487	 
	Pre-operating costs
	 	 	—	 	 	 	2,976	 
	Other
	 	 	11,093	 	 	 	15,682	 
	 
	 	 	
	 	 	 	
	 
	 
	 	$	38,163	 	 	$	51,145	 
	 
	 	 	
	 	 	 	
	 

16

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	5.	 	Deferred charges (continued):

	 	 	Amortization of deferred charges for 2003
amounted to $13.0 million (2002 — $8.9 million). Accumulated amortization of deferred charges at December
31, 2003 amounted to $58.3 million (2002 — $45.3 million).

	 	 	In connection with the repayment of certain long-term debt during 2002, the
Company recorded a gain of $31.0 million, which included a write-off of
deferred financing costs of $0.7 million (note 8(h)).

	6.	 	Other assets:

	 	 	 	 	 	 	 	 	 
	 	 	2003	 	2002
	 	 	
	 	

	Prepaid expenses
	 	$	20,630	 	 	$	20,519	 
	Inventories
	 	 	17,457	 	 	 	12,430	 
	Notes and loans receivable from employees
	 	 	1,532	 	 	 	2,752	 
	Other
	 	 	550	 	 	 	698	 
	 
	 	 	
	 	 	 	
	 
	 
	 	 	40,169	 	 	 	36,399	 
	Current
portion of other assets
	 	 	38,619	 	 	 	32,977	 
	 
	 	 	
	 	 	 	
	 
	 
	 	$	1,550	 	 	$	3,422	 
	 
	 	 	
	 	 	 	
	 

	7.	 	Consolidated statements of cash flows:

	 	(a)	 	Change in non-cash operating items:

	 	 	 	 	 	 	 	 	 
	 	 	2003	 	2002
	 	 	
	 	

	Increase in accounts receivable
	 	$	(38,946	)	 	$	(10,210	)
	Decrease (increase) in other assets
	 	 	(3,770	)	 	 	19,256	 
	Increase (decrease) in accounts payable
and accrued liabilities
	 	 	37,464		 	 	22,996	 
	Increase (decrease) in unearned revenue
	 	 	(13,572	)	 	 	10,897	 
	Increase (decrease) in amounts due
affiliated companies, net
	 	 	(3,994	)	 	 	11,380	 
	Decrease in deferred gain
	 	 	(2,622	)	 	 	(655	)
	 
	 	 	
	 	 	 	
	 
	 
	 	$	(25,440	)	 	$	53,664	 
	 
	 	 	
	 	 	 	
	 

17

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	7.	 	Consolidated statements of cash flows (continued):

	 	(b)	 	Supplemental cash flow information:

	 	 	 	 	 	 	 	 	 
	 	 	2003	 	2002
	 	 	
	 	

	Interest paid
	 	$	199,627	 	 	$	195,755	 
	Income taxes paid
	 	 	6,239	 	 	 	7,710	 

	8.	 	Long-term debt:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Interest rate	 	2003	 	2002
	 	 	
	 	
	 	

	(a)Bank credit facility	 	Floating	 	$	138,000	 	 	$	149,000	 
	(b)Senior Secured Notes, due 2006
	 	 	10-1/2	%	 	 	160,000	 	 	 	160,000	 
	(c)Senior Secured Notes, due 2007
	 	 	8.30	%	 	 	253,453	 	 	 	309,775	 
	(d)Senior Secured Debentures, due 2008
	 	 	9-3/8	%	 	 	430,589	 	 	 	526,275	 
	(e)Senior Secured Notes, due 2011
	 	 	9-5/8	%	 	 	633,276	 	 	 	774,004	 
	(f)Senior Secured Debentures, due 2016
	 	 	9-3/4	%	 	 	200,193	 	 	 	244,680	 
	(g)Senior Subordinated Notes, due 2007
	 	 	8.80	%	 	 	231,443	 	 	 	282,875	 
	Mortgage payable and capital leases	 	Various	 	 	26,185	 	 	 	31,174	 
	 
	 	 	 	 	 	 	
	 	 	 	
	 
	 
	 	 	 	 	 	 	2,073,139	 	 	 	2,477,783	 
	
Current portion of long term debt
	 	 	 	 	 	 	(2,378	)	 	 	(5,163	)
	 
	 	 	 	 	 	 	
	 	 	 	
	 
	 
	 	 	 	 	 	 	2,070,761	 	 	 	2,472,620	 
	Effect of cross-currency interest
rate exchange agreements
	 	 	 	 	 	 	136,464	 	 	 	(117,708	)
	 
	 	 	 	 	 	 	
	 	 	 	
	 
	 
	 	 	 	 	 	$	2,207,225	 	 	$	2,354,912	 
	 
	 	 	 	 	 	 	
	 	 	 	
	 

     Further details of long-term debt are as follows:

	 	(a)	 	Bank credit facility:

	 		 	At December 31, 2003, $138.0 million (2002 — $149.0 million) of debt
was outstanding under the bank credit facility, which provides the
Company with, among other things, up to $700.0 million from a
consortium of Canadian financial institutions.

18

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	8.	 	Long-term debt (continued):

Under the credit facility, the Company may borrow at various rates,
including the bank prime rate to the bank prime rate plus 1-3/4% per
annum, the bankers’ acceptance rate plus 1% to 2-3/4% per annum and the
London Inter-Bank Offered Rate (“LIBOR”) plus 1% to 2-3/4% per annum.
The Company’s bank credit facility requires, among other things, that
the Company satisfy certain financial covenants, including the
maintenance of certain financial ratios.

Subject to the footnote (*) below, this credit facility is available on
a fully revolving basis until the first date specified below, at which
time the facility becomes a revolving/reducing facility and the
aggregate amount of credit available under the facility will be reduced
as follows:

	 	 	 	 	 
	 	 	Reduction at
	Date of reduction (*)	 	each date
	
	 	

	On April 30:
	 	 	 	 
	2006
	 	$	140,000	 
	2007
	 	 	140,000	 
	2008
	 	 	420,000	 

	 	*	 	The bank credit facility will mature on May 31, 2006 if
the Company’s Senior Secured Notes due 2006 are not repaid (by
refinancing or otherwise) on or prior to December 31, 2005. If
these notes are repaid, then the bank credit facility will mature
on September 30, 2007 if the Company’s Senior Secured Notes due
2007 are not repaid (by refinancing or otherwise) on or prior to
April 30, 2007.

	 		 	The credit facility requires that any additional senior debt (other
than the bank credit facility described above) that is denominated in a
foreign currency be hedged against foreign exchange fluctuations on a
minimum of 50% of such additional senior borrowings in excess of the
Canadian equivalent of U.S. $25.0 million.

	 		 	Borrowings under the credit facility are secured by the pledge of a
senior bond issued under a deed of trust, which is secured by
substantially all the assets of the Company and certain of its
subsidiaries, subject to certain exceptions and prior liens.

	 	(b)	 	Senior Secured Notes, due 2006:

	 		 	The Company’s $160.0 million Senior Secured Notes mature on June 1,
2006. These notes are redeemable in whole or in part, at the Company’s
option, at any time subject to a certain prepayment premium.

19

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	8.	 	Long-term debt (continued):

	 	(c)	 	Senior Secured Notes, due 2007:

	 		 	The Company’s U.S. $196.1 million Senior Secured Notes mature on
October 1, 2007. These notes are redeemable in whole or in part, at
the Company’s option, on or after October 1, 2002 at 104.15% of the
principal amount, declining rateably to 100% of the principal amount on
or after October 1, 2005, plus, in each case, interest accrued to the
redemption date.

	 	(d)	 	Senior Secured Debentures, due 2008:

	 		 	The Company’s U.S. $333.2 million Senior Secured Debentures mature on
June 1, 2008. These debentures are redeemable in whole or in part, at
the Company’s option, at any time on or after June 1, 2003 at 104.688%
of the principal amount, declining rateably to 100% of the principal
amount on or after June 1, 2006, plus, in each case, interest accrued
to the redemption date.

	 	(e)	 	Senior Secured Notes, due 2011:

	 		 	The Company’s U.S. $490.0 million Senior Secured Notes mature on May 1,
2011. During 2002, the Company repurchased U.S. $10.0 million
principal amount of these notes (note 8(h)). These notes are
redeemable in whole or in part, at the Company’s option, at any time
subject to a certain prepayment premium.

	 	(f)	 	Senior Secured Debentures, due 2016:

	 		 	The Company’s U.S. $154.9 million Senior Secured Debentures mature on
June 1, 2016. These debentures are redeemable in whole or in part, at
the Company’s option, at any time, subject to a certain prepayment
premium.

Each of the Company’s senior secured notes and debentures described above
is secured by the pledge of a senior bond that is secured by the same
security as the security for the bank credit facility described in (a)
above and ranks equally with the bank credit facility.

20

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	8.	 	Long-term debt (continued):

	 	(g)	 	Senior Subordinated Notes, due 2007:

	 		 	The Company’s U.S. $179.1 million Senior Subordinated Notes mature on
October 1, 2007. During 2002, the Company repurchased an aggregate
U.S. $35.9 million principal amount of these notes (note 8(h)). These
notes are redeemable in whole or in part, at the Company’s option, on
or after October 1, 2002 at 104.40% of the principal amount declining
rateably to 100% of the principal amount on or after October 1, 2005
plus, in each case, interest accrued to the redemption date. The
subordinated notes are subordinated to all existing and future senior
secured obligations of the Company (including the bank credit facility
and the senior secured notes and debentures). The subordinated notes
are not secured by the pledge of a senior bond.

Interest is payable semi-annually on all of the notes and debentures.

	 	(h)	 	Repayment of long-term debt:

	 		 	During 2002, an aggregate of U.S. $335.1 million notional amount of
cross-currency interest rate exchange agreements were terminated either
by unwinding or maturity, resulting in aggregate net cash proceeds of
$64.4 million. The Company used a portion of the total proceeds of
these transactions to repurchase in total U.S. $45.9 million principal
amount of Senior Secured Notes and Senior Subordinated Notes. As a
result, the Company recorded a gain of $30.7 million on the debt
repurchased, recorded a gain of $1.0 million from the unwinding of the
cross-currency interest rate exchange agreements, and wrote off $0.7
million in deferred financing costs, for a net gain of $31.0 million.
In addition, the Company had deferred a gain of $22.5 million on the
unwinding of the cross-currency interest rate exchange agreements,
which is being amortized to interest expense over the remaining life of
the related debt. Amortization in 2003 was $2.6 million (2002 — $0.7
million).

	 	(i)	 	Interest exchange agreements:

	 	(i)	 	At December 31, 2003 and 2002, total U.S. dollar
denominated long-term debt amounted to $1,353.3 million. The
Company has entered into several cross-currency interest rate
exchange agreements in order to reduce the Company’s exposure to
changes in the exchange rate of the U.S. dollar as compared to the
Canadian dollar. At December 31, 2003 and 2002 U.S. $885.0
million or 65.4% is hedged through cross-currency interest rate
exchange agreements at an average exchange rate of Canadian
$1.4466 to U.S. $1.00.

21

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	8.	 	Long-term debt (continued):

	 	(ii)	 	The cross-currency interest rate exchange agreements have
the effect of converting the interest rate on U.S. $500.0 million
of long-term debt from an average U.S. dollar fixed interest rate
of 9.63% per annum to an average Canadian dollar fixed interest
rate of 10.29% per annum on $779.7 million (i.e., with an exchange
rate of Canadian $1.5595 to U.S. $1.00). The interest rate on an
additional U.S. $385.0 million has been converted from an average
U.S. dollar fixed interest rate of 9.38% per annum to $500.5
million at an average Canadian dollar floating interest rate equal
to the bankers’ acceptances rate plus 2.35% per annum, which
totalled 5.11% at December 31, 2003 (2002 — 5.22%) (i.e., with an
exchange rate of Canadian $1.3000 to U.S. $1.00).

The obligations of the Company to the counterparties under these
cross-currency interest rate exchange agreements are secured by
substantially all of the assets of the Company and generally rank equally
with the other secured indebtedness of the Company.

Total long-term debt at fixed interest rates at December 31, 2003 was
$1,571.1 million (2002 — $1,710.6 million) or 71.1% (2002 — 72.5%) of total
long-term debt. The Company’s effective weighted average interest rate on
all long-term debt as at December 31, 2003, including the effect of the
interest rate and cross-currency exchange agreements, was 8.32% (2002 —
8.42%).

	 	(j)	 	Principal repayments:

	 		 	At December 31, 2003, principal repayments due within each of the next
five years and in total thereafter on all long-term debt are as
follows:

	 	 	 	 	 
	Year ending December 31:	 	 	 	 
	2004
	 	$	2,378	 
	2005
	 	 	905	 
	2006
	 	 	182,674	 
	2007
	 	 	485,124	 
	2008
	 	 	568,589	 
	 
	 	 	
	 
	 
	 	 	1,239,670	 
	Thereafter
	 	 	833,469	 
	 
	 	 	
	 
	 
	 	 	2,073,139	 
	Effect of cross-currency interest rate exchange agreements
	 	 	136,464	 
	 
	 	 	
	 
	 
	 	$	2,209,603	 
	 
	 	 	
	 

22

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	8.	 	Long-term debt (continued):

	 	 	The provisions of the long-term debt agreements described above impose, in
most instances, restrictions on the operations and activities of the
Company. Generally, the most significant of those restrictions are debt
incurrence and maintenance tests, restrictions upon additional investments,
sales of assets, payment of dividends and the payment of principal or
interest on certain subordinated debt. In addition, the repayment dates of
certain debt agreements may be accelerated if there is a change in control
of the Company. At December 31, 2003, the Company was in compliance with
all terms of the long-term debt agreements.

	9.	 	Shareholders’ equity:

	 	 	 	 	 	 	 	 	 	 
	 	 	 	2003	 	2002
	 	 	 	
	 	

	Capital stock:
	 	 	 	 	 	 	 	 
	 	90,468,259 Class A Multiple Voting Shares
	 	$	962,661	 	 	$	962,661	 
	 	51,430,178 Class B Restricted Voting Shares
(2002 — 51,271,683)
	 	 	925,308	 	 	 	922,426	 
	 	 
	 	 	
	 	 	 	
	 
	 
	 	 	1,887,969	 	 	 	1,885,087	 
	 	Deduct amounts receivable from employees under
the share purchase plan
	 	 	—	 	 	 	(1,901	)
	 	 
	 	 	
	 	 	 	
	 
	 
	 	 	1,887,969	 	 	 	1,883,186	 
	Deficit
	 	 	(1,444,889	)	 	 	(1,582,730	)
	 	 
	 	 	
	 	 	 	
	 
	 
	 	$	443,080	 	 	$	300,456	 
	 	 
	 	 	
	 	 	 	
	 

	 	(a)	 	Capital stock:

	 		 	The Articles of Incorporation of the Company impose restrictions on the
issuance or transfer of any shares of the Company where such issuance
or transfer would, in the opinion of the Board of Directors of the
Company, jeopardize the ability of the Company to obtain, renew or
maintain licences relating to its business.

23

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	9.	 	Shareholders’ equity (continued):

	 	(b)	 	Rights and conditions:

	 		 	Both classes of common shares have an unlimited number of authorized
shares and are without par value.

	 		 	The Class A Multiple Voting Shares are entitled to 10 votes per share
and are convertible at any time on a one-for-one basis into Class B
Restricted Voting Shares.

	 		 	The Class B Restricted Voting Shares are entitled to one vote per share
on all matters other than the appointment of auditors and generally on
the election of directors. The Class B Restricted Voting Shares are
entitled to elect three directors, voting separately as a class.

	 	(c)	 	Capital stock changes:

	 	(i)	 	During 2003, the Company issued 158,495 (2002 — 19,759)
Class B Restricted Voting Shares upon the exercise of stock
options for cash of $2.9 million (2002 — $0.3 million).

	 	(ii)	 	During 2002, 135,325 Class B Restricted Voting Shares
were issued under the Company’s employee share purchase plan for
consideration of $1.9 million.

	 	(d)	 	Stock option plan:

	 		 	The Company’s stock option plan provides senior employee participants
an incentive to acquire an equity ownership interest in the Company
over a period of time and, as a result, reinforce executives’ attention
on the long-term interest of the Company and its shareholders. Under
the plan, options to purchase Class B Restricted Voting Shares of the
Company on a one-for-one basis may be granted to employees, directors
and officers of the Company by the Board of Directors or by the
Company’s Management Compensation Committee. There are 4,750,000
options authorized under the plan. The term of each option is 10
years; the vesting period is generally four years but may be adjusted
by the Management Compensation Committee on the date of grant. The
exercise price for options is equal to the fair market value of the
Class B Restricted Voting Shares, as quoted on The Toronto Stock
Exchange on the grant date.

24

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	9.	 	Shareholders’ equity (continued):

Details of the stock option plan are as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	2003	 	2002
	 	 	
	 	

	 	 	 	 	 	 	Weighted	 	 	 	 	 	Weighted
	 	 	 	 	 	 	average	 	 	 	 	 	average
	 	 	Number	 	exercise	 	Number	 	exercise
	 	 	of options	 	price	 	of options	 	price
	 	 	
	 	
	 	
	 	

	Options outstanding, beginning
of year
	 	 	3,471,017	 	 	$	25.04	 	 	 	3,641,613	 	 	$	25.57	 
	Granted
	 	 	1,111,200	 	 	 	20.47	 	 	 	269,800	 	 	 	16.58	 
	Exercised
	 	 	(158,495	)	 	 	18.18	 	 	 	(19,759	)	 	 	17.62	 
	Forfeited/expired
	 	 	(196,625	)	 	 	22.39	 	 	 	(420,637	)	 	 	24.50	 
	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	Options outstanding, end of year
	 	 	4,227,097	 	 	 	24.22	 	 	 	3,471,017	 	 	 	25.04	 
	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	Exercisable, end of year
	 	 	2,291,372	 	 	$	27.36	 	 	 	1,869,442	 	 	$	26.72	 
	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 

At December 31, 2003, the range of exercise prices, the weighted
average exercise price and the weighted average remaining contractual
life are as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Options outstanding	 	Options exercisable
	 	 	
	 	

	 	 	 	 	 	 	Weighted	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	average	 	Weighted	 	 	 	 	 	Weighted
	 	 	 	 	 	 	remaining	 	average	 	 	 	 	 	average
	Range of	 	Number	 	contractual	 	exercise	 	Number	 	exercise
	exercise prices	 	outstanding	 	life (years)	 	price	 	exercisable	 	price
	
	 	
	 	
	 	
	 	
	 	

	$11.82 - $16.88
	 	 	1,158,272	 	 	 	7.6	 	 	$	16.33	 	 	 	436,022	 	 	$	16.02	 
	$18.15 - $22.06
	 	 	1,891,825	 	 	 	7.5	 	 	 	21.12	 	 	 	1,117,450	 	 	 	21.14	 
	$25.96 - $32.75
	 	 	588,200	 	 	 	7.8	 	 	 	27.00	 	 	 	149,100	 	 	 	30.07	 
	$37.74 - $51.53
	 	 	588,800	 	 	 	6.3	 	 	 	46.87	 	 	 	588,800	 	 	 	46.87	 
	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	Total
	 	 	4,227,097	 	 	 	7.4	 	 	 	24.22	 	 	 	2,291,372	 	 	 	27.36	 
	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 

There was no compensation expense related to stock options for 2003 or
2002.

Certain of the Company’s executives are also eligible to participate in
RCI’s stock option plan.

25

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	9.	 	Shareholders’ equity (continued):

For stock options granted to employees on or after January 1, 2002, had
the Company determined compensation expense based on the “fair value”
at the grant date of such stock option awards consistent with the
method prescribed under CICA Handbook Section 3870, the Company’s net
income (loss) for the year and earnings (loss) per share would have
been reported as the pro forma amounts indicated below. The fair value
of the options is amortized on a straight-line basis over the vesting
period.

	 	 	 	 	 	 	 	 	 
	 	 	2003	 	2002
	 	 	
	 	

	Net income (loss) for the year, as reported
	 	$	137,841	 	 	$	(90,705	)
	Stock-based compensation expense
	 	 	(1,920	)	 	 	(331	)
	 
	 	 	
	 	 	 	
	 
	Pro forma net income (loss) for the year
	 	$	135,921	 	 	$	(91,036	)
	 
	 	 	
	 	 	 	
	 
	Basic and diluted earnings (loss) per share,
as reported
	 	$	0.97	 	 	$	(0.64	)
	Effect of stock-based compensation expense
	 	 	(0.01	)	 	 	—	 
	 
	 	 	
	 	 	 	
	 
	Pro forma basic and diluted earnings (loss) per share
	 	$	0.96	 	 	$	(0.64	)
	 
	 	 	
	 	 	 	
	 

The weighted average estimated fair value at the date of the grant for
options granted by the Company in fiscal 2003 was $12.20
(2002 — $8.35)
per share. No options were granted by RCI to the Company’s employees
in 2003 and 2002.

The fair value of each option granted was estimated on the date of the
grant using the Black-Scholes fair value option pricing model with the
following assumptions:

	 	 	 	 	 	 	 	 	 
	 	 	2003	 	2002
	 	 	
	 	

	Risk-free interest rate
	 	 	4.50	%	 	 	4.81	%
	Dividend yield
	 	 	—	 	 	 	—	 
	Volatility factor of the future expected market price of
the Company’s Class B Restricted Voting Shares
	 	 	55.17	%	 	 	51.95	%
	Weighted average expected life of the options	 	 	5.3 years	 	 	5 years
	 
	 	 	
	 	 	 	
	 

26

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	9.	 	Shareholders’ equity (continued):

	 	(e)	 	Employee share purchase plan:

The employee share purchase plan was provided to enable employees of
the Company an opportunity to obtain an equity interest in the Company
by permitting them to acquire Class B Restricted Voting Shares. A
total of 800,000 Class B Restricted Voting Shares in aggregate were set
aside and reserved for allotment and issuance pursuant to the employee
share purchase plan.

Under the terms of the employee share purchase plan, participating
employees of the Company may have received a bonus at the end of the
term of the plan. The bonus was calculated as the difference between
the share price at the date the employee received the loan and the
lesser of 85% of the closing price at which the shares traded on The
Toronto Stock Exchange on the trading day immediately prior to the
purchase date or the closing price on a date that is approximately one
year subsequent to the original issue date.

Compensation expense recorded for the employee share purchase plan for
2003 was $0.3 million (2002 — $1.0 million).

	10.	 	Operating revenue:

	 	 	 Operating revenue is comprised of the following:

	 	 	 	 	 	 	 	 	 
	 	 	2003	 	2002
	 	 	
	 	

	Postpaid (voice and data)
	 	$	1,911,073	 	 	$	1,628,095	 
	Prepaid
	 	 	91,255	 	 	 	91,151	 
	One-way messaging
	 	 	27,565	 	 	 	35,238	 
	 
	 	 	
	 	 	 	
	 
	 
	 	 	2,029,893	 	 	 	1,754,484	 
	Equipment sales
	 	 	177,901	 	 	 	137,030	 
	 
	 	 	
	 	 	 	
	 
	 
	 	$	2,207,794	 	 	$	1,891,514	 
	 
	 	 	
	 	 	 	
	 

27

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	11.	 	Change in estimates of sales tax and CRTC contribution liabilities:

	 	(a)	 	Sales tax liability:

	 		 	During 2002, the Company received clarification of a provincial sales
tax liability for a matter common to the wireless industry. As a
result, the Company revised its estimate with respect to this liability
and released a provision of $19.2 million associated with this matter,
which had been established in previous years.

	 	(b)	 	CRTC contribution liabilities:

	 		 	The Company is required to make payments equal to a percentage of
adjusted revenues in accordance with the revenue-based contribution
scheme implemented by the Canadian Radio-television and
Telecommunications Commission (“CRTC”). Prior to 2002, the calculation
of the amount payable was subject to a number of matters of
interpretation between the CRTC and the Company. These matters of
interpretation were clarified in April 2002 by the CRTC, resulting in
an additional amount of $6.8 million in respect of 2001 being payable
by the Company. This additional amount was recorded in 2002.

	12.	 	Income taxes:

	 	 	The income tax effects of temporary differences that give rise to
significant portions of future income tax assets and liabilities are as
follows:

	 	 	 	 	 	 	 	 	 	 
	 	 	 	2003	 	2002
	 	 	 	
	 	

	Future income tax assets:
	 	 	 	 	 	 	 	 
	 	Non-capital income tax losses and research
and development expenses carried forward
	 	$	357,795	 	 	$	333,191	 
	 	Deductions relating to long-term debt and
other transactions denominated in U.S. dollars
	 	 	18,049	 	 	 	49,581	 
	 	Future income tax deductions relating to
accounting accruals and goodwill
	 	 	7,898	 	 	 	8,449	 
	 	Other deductible differences
	 	 	3,156	 	 	 	4,116	 
	 	 
	 	 	
	 	 	 	
	 
	 	Total future income tax assets
	 	 	386,898	 	 	 	395,337	 
	 	Less valuation allowance
	 	 	(298,174	)	 	 	(304,732	)
	 	 
	 	 	
	 	 	 	
	 
	 
	 	 	88,724	 	 	 	90,605	 
	 	 
	 	 	
	 	 	 	
	 
	Future income tax liabilities:
	 	 	 	 	 	 	 	 
	 	Property, plant and equipment, and spectrum licences
	 	 	(88,724	)	 	 	(90,605	)
	 	 
	 	 	
	 	 	 	
	 
	 	Total future income tax liabilities
	 	 	(88,724	)	 	 	(90,605	)
	 	 
	 	 	
	 	 	 	
	 
	Net future income tax assets
	 	$	—	 	 	$	—	 
	 	 
	 	 	
	 	 	 	
	 

28

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	12.	 	Income taxes (continued):

	 	 	In assessing the realizability of future income tax assets, management
considers whether it is more likely than not that some portion or all of
the future income tax assets will be realized. The ultimate realization of
future income tax assets is dependent upon the generation of future taxable
income during the years in which the temporary differences are deductible.
Management considers the scheduled reversals of future income tax
liabilities, the character of the income tax assets and the tax planning
strategies in place making this assessment.

	 	 	As at December 31, 2003, the Company has determined that the realization of
its net future income tax asset of $298.2 million does not meet the
criteria of realization being “more likely than not”. Therefore, a full
valuation allowance has been recorded against this future income tax asset.

	 	 	Total income tax expense varies from the amounts that would be computed by
applying the statutory income tax rate to the loss before income taxes for
the following reasons:

	 	 	 	 	 	 	 	 	 	 
	 	 	 	2003	 	2002
	 	 	 	
	 	

	Statutory income tax rate
	 	 	36.3	%	 	 	38.4	%
	 
	 	 	
	 	 	 	
	 
	Income tax expense (recovery) on net income
(loss) before income taxes
	 	$	50,947	 	 	$	(32,803	)
	Increase
(decrease) in income taxes resulting from:
	 	 	 	 	 	 	 	 
	 	Change in the valuation allowance for
future income tax assets
	 	 	(5,912	)	 	 	36,294	 
	 	Adjustments to future income tax
assets and liabilities for changes in
substantively enacted tax rates
	 	 	(18,851	)	 	 	5,517	 
	 	Non-deductible amortization and write-off of
deferred foreign exchange
	 	 	834	 	 	 	68	 
	 	Non-taxable portion of foreign exchange
gain on long-term debt
	 	 	(24,429	)	 	 	(6,020	)
	 	Other items
	 	 	(2,589	)	 	 	(3,056	)
	 	Large Corporations Tax
	 	 	2,393	 	 	 	5,258	 
	 
	 	 	
	 	 	 	
	 
	Income tax expense
	 	$	2,393	 	 	$	5,258	 
	 
	 	 	
	 	 	 	
	 

29

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	12.	 	Income taxes (continued):

	 	 	As at December 31, 2003, the Company has the following non-capital income
tax losses available to reduce future years’ income for income tax
purposes:

	 	 	Income tax losses expiring in the year ending December 31:

	 	 	 	 	 
	2004
	 	$	238,500	 
	2005
	 	 	74,900	 
	2007
	 	 	259,000	 
	2008
	 	 	284,200	 
	2009
	 	 	112,200	 
	 
	 	 	
	 
	Total
	 	$	968,800	 
	 
	 	 	
	 

	13.	 	Earnings (loss) per share:

	 	 	The following table sets forth the calculation of basic and diluted
earnings (loss) per share:

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	2003	 	2002
	 	 	 	 	
	 	

	Numerator:
	 	 	 	 	 	 	 	 
	 	Net income (loss) for the year — basic and diluted
	 	$	137,841	 	 	$	(90,705	)
	 	 
	 	 	
	 	 	 	
	 
	Denominator (in thousands):
	 	 	 	 	 	 	 	 
	 	Weighted average number of shares
outstanding — basic
	 	 	141,773	 	 	 	141,608	 
	 	Effect of dilutive securities:
	 	 	 	 	 	 	 	 
	 	 	Employee stock options
	 	 	260	 	 	 	—	 
	 	 
	 	 	
	 	 	 	
	 
	Weighted average number of shares
outstanding — diluted
	 	 	142,033	 	 	 	141,608	 
	 	 
	 	 	
	 	 	 	
	 
	Earnings (loss) per share — basic and diluted
	 	$	0.97	 	 	$	(0.64	)
	 	 
	 	 	
	 	 	 	
	 

	 	 	For 2003 and 2002, the effect of potentially dilutive stock options was
excluded from the computation of diluted earnings (loss) per share as their
effect is anti-dilutive. In addition, stock options totalling
approximately 3.1 million (2002 — 3.5 million) that are anti-dilutive were
excluded from the calculation.

30

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	14.	 	Related party transactions:

	 	 	The Company entered into the following related party transactions:

	 	(a)	 	The amount due to (from) RCI and its subsidiaries, and AWE is
comprised of the following:

	 	 	 	 	 	 	 	 	 
	 	 	2003	 	2002
	 	 	
	 	

	RCI
	 	$	24	 	 	$	3,588	 
	Rogers Cable Inc. (“Cable”)
	 	 	137	 	 	 	28	 
	AWE
	 	 	(114	)	 	 	425	 
	 
	 	 	
	 	 	 	
	 
	 
	 	$	47	 	 	$	4,041	 
	 
	 	 	
	 	 	 	
	 

	 		 	The above amounts reflect intercompany charges for capital and
operating expenditures and are short-term in nature.

	 	(b)	 	The Company has entered into certain transactions and agreements
in the normal course of business with RCI, RCI’s subsidiaries and AWE
as follows:

	 	(i)	 	Management fees:

	 		 	The Company has entered into a management agreement under which RCI
provides executive, administrative, financial and various additional
services to the Company. Interest is charged by RCI on unpaid
management fees at the bank prime rate plus 2% per annum. The
management agreement is subject to termination by either party at
the end of any calendar year on 12 months’ notice.

	 	(ii)	 	Cost-sharing arrangements:

	 		 	The Company has entered into certain cost-sharing arrangements with
RCI and its affiliates including accounting, purchasing, human
resources, customer service call centres and collections call
centres, real estate administration, accounts payable processing,
remittance processing, payroll processing, e-commerce, the RCI data
centre and other common services and activities. The Company shares
both the operating expense and PP&E expenditures related to these
activities on a cost recovery basis in accordance with the services
provided.

31

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	14.	 	Related party transactions (continued):

	 		 	The Company has entered into agreements with Cable to share, on a
pro rata basis, the cost of certain fibre-optic and microwave
transmission facilities. In addition, long-term service
arrangements exist with Cable for transmission services on
fibre-optic facilities owned by Cable.

	 		 	The Company purchases accounts receivable from Cable for customers
who receive a consolidated invoice. The Company receives a fee,
based on actual costs incurred, for billing and collection services.

	 		 	The Company also leases certain office space it owns to RCI and RCI’s subsidiaries.

	 	(iii)	 	Wireless products and services:

	 		 	The Company has entered into an agreement with Cable for the sale of
its products and services through Cable’s retail outlets. The
Company pays Cable for services provided in respect of subscriber
activation and customer service.

	 		 	In addition, the Company provides wireless services to RCI and RCI’s subsidiaries.

	 	(iv)	 	Advertising:

	 		 	The Company pays Rogers Media Inc. (“Media”), a subsidiary of RCI,
for various advertising on its radio and television broadcasting
stations and in its publications.

	 	(v)	 	Roaming agreement:

	 		 	The Company maintains a reciprocal agreement whereby AWE provides
wireless communications services to the Company’s subscribers when
they travel to the United States, and the Company provides the same
services to AWE subscribers when they travel to Canada.

	 	(vi)	 	Over-the-air activation:

	 		 	The Company utilizes the services of AWE for automated
“over-the-air” programming of subscriber handsets.

32

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	14.	 	Related party transactions (continued):

	 		 	A summary of all significant charges from (to) related parties, which
have been accounted for at exchange amounts, is as follows:

	 	 	 	 	 	 	 	 	 	 
	 	 	 	2003	 	2002
	 	 	 	
	 	

	RCI:
	 	 	 	 	 	 	 	 
	 	Management fees
	 	$	11,336	 	 	$	11,006	 
	 	Rent income
	 	 	(7,980	)	 	 	(8,144	)
	 	Wireless
products and services
	 	 	(978	)	 	 	(79	)
	 	Cost of shared operating expenses
	 	 	192,292	 	 	 	208,257	 
	 	Cost of PP&E
	 	 	24,656	 	 	 	37,418	 
	 	 
	 	 	
	 	 	 	
	 
	 
	 	 	219,326	 	 	 	248,458	 
	 	 
	 	 	
	 	 	 	
	 
	Cable:
	 	 	 	 	 	 	 	 
	 	Wireless products and services for resale
	 	 	(14,926	)	 	 	(10,116	)
	 	Subscriber activation commissions and
customer service
	 	 	9,511	 	 	 	8,817	 
	 	Rent income
	 	 	(3,516	)	 	 	(3,587	)
	 	Wireless
products and services
	 	 	(2,355	)	 	 	(2,214	)
	 	Consolidated
billing services
	 	 	(1,499	)	 	 	(655	)
	 	Transmission facilities usage
	 	 	440	 	 	 	440	 
	 	 
	 	 	
	 	 	 	
	 
	 
	 	 	(12,345	)	 	 	(7,315	)
	 	 
	 	 	
	 	 	 	
	 
	Media:
	 	 	 	 	 	 	 	 
	 	Advertising
	 	 	3,000	 	 	 	2,940	 
	 	Rent income
	 	 	(8,493	)	 	 	(1,881	)
	 	Wireless services
	 	 	(516	)	 	 	(181	)
	 	 
	 	 	
	 	 	 	
	 
	 
	 	 	(6,009	)	 	 	878	 
	 	 
	 	 	
	 	 	 	
	 
	AWE:
	 	 	 	 	 	 	 	 
	 	Roaming revenue
	 	 	(13,030	)	 	 	(13,910	)
	 	Roaming expense
	 	 	13,628	 	 	 	18,028	 
	 	Over-the-air activation
	 	 	292	 	 	 	680	 
	 	 
	 	 	
	 	 	 	
	 
	 
	 	 	890	 	 	 	4,798	 
	 	 
	 	 	
	 	 	 	
	 
	 
	 	$	201,862	 	 	$	246,819	 
	 	 
	 	 	
	 	 	 	
	 

33

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	14.	 	Related party transactions (continued):

	 	(c)	 	The Company has entered into certain transactions with companies,
the partners or senior officers of which are directors of the Company
and RCI. During 2003, total amounts paid by the Company to these
related parties for legal services and commissions paid on premiums
for insurance coverage aggregated $1.5 million (2002 —
$1.7 million) and for interest charges aggregated
$12.0 million (2002 — $8.3 million).

	15.	 	Financial instruments:

	 	(a)	 	Fair values:

	 		 	The Company has determined the fair values of its financial instruments
as follows:

	 	(i)	 	Cash and cash equivalents, accounts receivable, notes and
loans receivable from employees, amounts due to affiliated
companies, bank advances, and accounts payable and accrued
liabilities:

	 		 	The carrying amounts in the consolidated balance sheets approximate
fair values because of the short-term nature of these instruments.

	 	(ii)	 	Long-term debt:

	 		 	The fair values of each of the Company’s long-term debt instruments
are based on the year-end trading values.

	 	(iii)	 	Interest exchange agreements:

	 		 	The fair values of the Company’s cross-currency interest rate
exchange agreements are based on values quoted by the counterparties
to the agreements.

34

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	15.	 	Financial instruments (continued):

	 		 	The estimated fair values of the Company’s long-term debt and related
cross-currency interest rate exchange agreements as at December 31,
2003 and 2002 are as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	2003	 	2002
	 	 	 	
	 	

	 	 	 	Carrying	 	Estimated	 	Carrying	 	Estimated
	 	 	 	amount	 	fair value	 	amount	 	fair value
	 	 	 	
	 	
	 	
	 	

	Liability (asset):
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Long-term debt
	 	$	2,073,139	 	 	$	2,281,633	 	 	$	2,477,783	 	 	$	2,332,673	 
	 	Cross-currency
interest rate
exchange
agreements
	 	 	136,464	 	 	 	120,419	 	 	 	(117,708	)	 	 	(240,707	)
	 	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 
	 
	 	$	2,209,603	 	 	$	2,402,052	 	 	$	2,360,075	 	 	$	2,091,966	 
	 	 
	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 

	 		 	Fair value estimates are based on relevant market information and
information about the financial instrument as at the measurement date.
These estimates inherently include subjective components involving
uncertainties and matters of significant judgment and, therefore,
cannot be determined with precision. Changes in assumptions could
significantly affect the estimates.

	 	(b)	 	Other disclosures:

	 	(i)	 	The credit risk of the cross-currency interest rate
exchange agreements arises from the possibility that the
counterparties to the agreements may default on their obligations
under the agreements in instances where these agreements have
positive fair value to the Company. The Company assesses the
creditworthiness of the counterparties in order to minimize the
risk of counterparty default under the agreements. All of the
portfolio is held by financial institutions with a Standard and
Poors rating (or the equivalent) ranging from A+ to AA. The
Company has not required collateral or other security to support
the cross-currency interest rate exchange agreements due to the
Company’s favourable assessment of the creditworthiness of the
counterparties.

	 	(ii)	 	The Company has a significant concentration of credit
risk from a supplier of network infrastructure related to volume
rebates receivable totalling approximately $72.1 million, which is
included in accounts receivable at December 31, 2003.

35

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	16.	 	Commitments:

	 	(a)	 	The Company is committed, under the terms of licences issued by
Industry Canada, to spend 2% of certain revenues earned in each year
on research and development activities. The Company believes it is in
full compliance with this requirement.

	 	(b)	 	The future minimum lease payments under operating leases,
primarily for the rental of premises for the placement of towers,
radio base stations and transmission equipment, as well as for
administrative and distribution facilities at December 31, 2003, are
as follows:

	 	 	 	 	 
	Year ending December 31:
	 	 	 	 
	2004
	 	$	34,394	 
	2005
	 	 	30,543	 
	2006
	 	 	23,983	 
	2007
	 	 	16,050	 
	2008
	 	 	10,280	 
	2009 and thereafter
	 	 	19,342	 
	 
	 	 	
	 
	 
	 	$	134,592	 
	 
	 	 	
	 

	 		 	Rent expense for 2003 amounted to $35.0 million (2002 — $31.5 million).

	17.	 	Contingent liabilities:

	 	 	There exist certain legal actions against the Company, none of which is
expected to have a material adverse effect on the consolidated financial
position of the Company.

36

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	18.	 	Canadian and United States accounting policy differences:

	 	 	The consolidated financial statements of the Company have been prepared in
accordance with GAAP as applied in Canada. In the following respects, GAAP
as applied in the United States differs from that applied in Canada.

	 	 	If United States GAAP were employed, the net income (loss) in each year
would be adjusted as follows:

	 	 	 	 	 	 	 	 	 	 
	 	 	 	2003	 	2002
	 	 	 	
	 	

	Net income (loss) for the year based on
Canadian GAAP
	 	$	137,841	 	 	$	(90,705	)
	Interest capitalized (c)
	 	 	5,693	 	 	 	6,461	 
	Pre-operating costs capitalized, net (d)
	 	 	2,976	 	 	 	2,976	 
	Depreciation expense (f)
	 	 	(2,968	)	 	 	(2,248	)
	Financial instruments (g)
	 	 	(102,787	)	 	 	88,121	 
	 
	 	 	
	 	 	 	
	 
	Net income based on United States GAAP
	 	$	40,755	 	 	$	4,605	 
	 
	 	 	
	 	 	 	
	 
	Earnings per share under United States GAAP:
	 	 	 	 	 	 	 	 
	 	Basic and diluted
	 	$	0.29	 	 	$	0.03	 
	 
	 	 	
	 	 	 	
	 

	 	 	The cumulative effect of these adjustments on the consolidated
shareholders’ equity of the Company is as follows:

	 	 	 	 	 	 	 	 	 
	 	 	2003	 	2002
	 	 	
	 	

	Shareholders’ equity based on Canadian GAAP
	 	$	443,080	 	 	$	300,456	 
	“Pushed down” goodwill (a)
	 	 	770,757	 	 	 	770,757	 
	Amortization of goodwill (b)
	 	 	(248,890	)	 	 	(248,890	)
	Interest capitalized (c)
	 	 	31,243	 	 	 	25,550	 
	Pre-operating costs, net (d)
	 	 	—	 	 	 	(2,976	)
	Conversion costs (e)
	 	 	(3,911	)	 	 	(3,911	)
	Accumulated depreciation (f)
	 	 	(5,499	)	 	 	(2,531	)
	Financial instruments (g)
	 	 	9,861	 	 	 	112,648	 
	 
	 	 	
	 	 	 	
	 
	Shareholders’ equity based on United States GAAP
	 	$	996,641	 	 	$	951,103	 
	 
	 	 	
	 	 	 	
	 

37

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	18.	 	Canadian and United States accounting policy differences (continued):

	 	 	The areas of material differences between Canadian and United States GAAP
and their impact on the consolidated financial statements of the Company
are described below:

	 	(a)	 	“Push-down” accounting:

	 		 	Under United States GAAP, purchase transactions that result in an
entity becoming a wholly owned subsidiary establish a new basis of
accounting for the entity purchased and its assets and liabilities. As
a result of RCI’s acquisition of 100% of the Company in 1989 for United
States GAAP purposes, the Company must record as an asset in its
consolidated financial statements the amount of goodwill that was
recorded on the consolidated financial statements of RCI. As this
acquisition was financed principally by the parent company with
proceeds from other asset sales, the corresponding adjustment for the
assets recorded was an increase in shareholders’ equity.

	 		 	At the time of the acquisition by RCI, Canadian GAAP did not permit a
subsidiary company to alter the historical costs of its assets or
liabilities upon it being acquired.

	 	(b)	 	Amortization of goodwill:

	 		 	As a result of the “push-down” accounting described in (a) above, the
Company was required until 2001 to amortize the amount recorded as
goodwill under United States GAAP. The Company had been amortizing
this amount under United States GAAP over 40 years on a straight-line
basis.

	 	(c)	 	Interest capitalization:

	 		 	United States GAAP requires capitalization of interest costs as part of
the historical cost of acquiring certain qualifying assets which
require a period of time to prepare for their intended use. This is
not required under Canadian GAAP.

	 	(d)	 	Pre-operating costs:

	 		 	Under Canadian GAAP, the Company defers the incremental costs relating
to the development and pre-operating phases of new business, and
amortizes these costs on a straight-line basis over two years. Under
United States GAAP, these costs are expensed as incurred.

38

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	18.	 	Canadian and United States accounting policy differences (continued):

	 	(e)	 	Conversion costs:

	 		 	Under Canadian GAAP, the Company capitalized certain costs incurred to
convert data to its new customer care and billing system. United
States GAAP required these costs to be expensed as incurred.

	 	(f)	 	Accumulated depreciation:

	 		 	As a result of the capitalization of interest to PP&E required under
United States GAAP described in (c) above, additional depreciation on
the interest capitalized is recorded under United States GAAP in
subsequent periods. As a result of conversion costs being expensed
under United States GAAP as described in (e) above, depreciation
expense is reduced under United States GAAP in subsequent periods.

	 	(g)	 	Financial instruments:

	 		 	Under Canadian GAAP, the Company accounts for its cross-currency
interest rate exchange agreements as hedges of specific debt
instruments. Under United States GAAP, these instruments are not
accounted for as hedges as a result of adopting the pronouncement
entitled “Accounting for Derivative Instruments and Hedging Activities”
(“SFAS 133”), effective January 1, 2001. Changes in the fair value of
the derivative financial instruments, reflecting primarily market
changes in foreign exchange rates, interest rates, as well as the level
of short-term variable versus long-term fixed interest rates, are
recognized in income immediately. These gains and losses are
recognized together with foreign exchange translation gains and losses,
arising from changes in period-end foreign exchange rates, on the
respective long-term debt. Under United States GAAP, effective January
1, 2001, the Company recorded an increase of $29.2 million in the
carrying value of the derivative financial instruments, to a total of
$139.8 million, and a corresponding increase in the carrying value of
long-term debt. This increase in long-term debt has been recorded for
United States GAAP purposes as a cumulative transition adjustment that
is being amortized to net income over the remaining life of the
respective long-term debt.

39

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	18.	 	Canadian and United States accounting policy differences (continued):

	 	(h)	 	Operating income before depreciation and amortization:

	 		 	United States GAAP requires that depreciation and amortization and the
change in estimates of sales tax and CRTC contribution liabilities be
included in the determination of operating income and does not permit
the disclosure of a subtotal of the amount of operating income before
these items. Canadian GAAP permits the disclosure of a subtotal of the
amount of operating income before these items.

	 	(i)	 	Statements of cash flows:

	 	(i)	 	Canadian GAAP permits the disclosure of a subtotal of the
amount of cash provided by operations before changes in non-cash
working capital items in the consolidated statements of cash
flows. United States GAAP does not permit this subtotal to be
included.

	 	(ii)	 	Canadian GAAP permits bank advances to be included in the
determination of cash and cash equivalents in the consolidated
statements of cash flows. United States GAAP requires that bank
advances be reported as financing cash flows. As a result, under
United States GAAP, the total decrease in cash and cash
equivalents in 2003 in the amount of $14.3 million (2002 —
increase of $15.4 million) reflected in the consolidated
statements of cash flows would be decreased by $4.2 million (2002
 — $5.4 million) and cash flows under the heading “Financing
Activities” would be increased by $4.2 million (2002 — decrease by
$5.4 million).

	 	(j)	 	Statement of comprehensive income:

	 		 	United States GAAP requires the disclosure of a statement of
comprehensive income. Comprehensive income generally encompasses all
changes in shareholders’ equity, except those arising from transactions
with shareholders. The net income for each of 2003 and 2002 under
United States GAAP as reported is the same as the comprehensive income
for the corresponding years under United States GAAP.

40

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	18.	 	Canadian and United States accounting policy differences (continued):

	 	(k)	 	Other disclosures:

	 		 	United States GAAP requires the Company to disclose accrued
liabilities, which is not required under Canadian GAAP. Accrued
liabilities included in accounts payable and accrued liabilities as at
December 31, 2003 were $327.2 million (2002 — $407.1 million). At
December 31, 2003, accrued liabilities in respect of PP&E
totalled $48.1 million (2002 — $156.2 million), accrued interest
payable totalled $30.6 million (2002 — $34.9 million), accrued
liabilities related to payroll totalled $37.2 million (2002 — $33.4
million), and accrued liabilities related to commissions and residuals
totalled $56.4 million (2002 — $50.4 million). At December 31, 2002, there were no accrued liabilities
that individually exceeded 5% of current liabilities.

	 	(l)	 	Stock-based compensation disclosures:

	 		 	For options granted to employees, had the Company determined
compensation costs based on the fair value at grant dates of the stock
options consistent with the method prescribed under FASB’s SFAS 123,
the Company’s net income for the year and earnings per share for the
year would have been reported as the pro forma amounts indicated below:

	 	 	 	 	 	 	 	 	 
	 	 	2003	 	2002
	 	 	
	 	

	Net income in accordance with
United States GAAP as reported
	 	$	40,755	 	 	$	4,605	 
	Stock-based compensation expense
	 	 	(12,149	)	 	 	(13,708	)
	 
	 	 	
	 	 	 	
	 
	Pro forma net income (loss)
	 	$	28,606	 	 	$	(9,103	)
	 
	 	 	
	 	 	 	
	 
	Basic and diluted earnings per share
	 	$	0.29	 	 	$	0.03	 
	Effect of stock-based compensation
	 	 	(0.09	)	 	 	(0.09	)
	 
	 	 	
	 	 	 	
	 
	Pro forma basic and diluted
net income (loss) per share
	 	 	0.20	 	 	 	(0.06	)
	 
	 	 	
	 	 	 	
	 

	 		 	See note 9(d) for further details of stock-based compensation.

41

 

ROGERS WIRELESS COMMUNICATIONS INC.

Notes to Consolidated Financial Statements (continued)

(Tabular amounts in thousands of dollars, except per share amounts)

Years ended December 31, 2003 and 2002

	18.	 	Canadian and United States accounting policy differences (continued):

	 	(m)	 	Recent United States accounting pronouncements:

	 		 	In 2002, the Emerging Issues Task Force (“EITF”) reached a consensus
regarding EITF Issue 00-21, “Accounting for Revenue Arrangements with
Multiple Deliverables”. The consensus addresses not only when and how
an arrangement involving multiple deliverables should be divided into
separate units of accounting but also how the arrangement’s
consideration should be allocated among separate units. The
pronouncement is effective for the Company commencing with its 2004
fiscal year. The Company is currently determining the impact of
prospectively adopting EITF 00-21.

	 		 	In 2003, the FASB issued Statement 150, “Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and
Equity”. This statement requires that under specified circumstances,
these instruments be reclassified from equity to liabilities on the
balance sheet. This statement is effective for financial instruments
entered into or modified after May 31, 2003, and otherwise is effective
for the Company’s year beginning January 1, 2004. The Company did not
enter into any financial instruments within the scope of this statement
after May 31, 2003, and is presently assessing the impact of this
statement on the Company’s consolidated financial statements.

 

		
	19. 	Subsequent Events:

	 	(a)	 	On January 1, 2004, the Company adopted the following new accounting policies
with retrospective application, and as a
result have reflected these new accounting policies in the consolidated
balance sheet as at December 31, 2002 and 2003 and
in the consolidated statements of income and cash flows for each of
the years in the two year period ended December 31, 2003.

	 	(i)	 	GAAP Hierarchy

     As a result of the retroactive application of CICA Handbook Section 1100, “Generally Accepted Accounting Principles.” the
Company adopted a classified balance sheet presentation. In addition, changes in non-cash working capital items related to PP&E have been
reclassified to Investing Activities, PP&E Expenditures on the consolidated statements of cash flows. As a result, changes in non-cash
working capital and cash flows from operating activities have been increased (decreased) by ($98.6) million, and $87.7 million for the
years ended December 31, 2002 and 2003, respectively, and
PP&E expenditure and cash flows used in investing activities have increased (decreased)
by ($98.6) million, and $87.7 million for the years ended December 31, 2002 and 2003, respectively.

	 	(ii)	 	Revenue Recognition

     As a result of retroactively adopting new Canadian accounting standards, including Emerging Issues Committee,
Abstract 142, “Revenue Arrangements with Multiple Deliverables” and CICA Handbook Section 1100,
regarding the timing of revenue recognition and the classification of certain items as revenue or expense, the Company
made the following changes to its classification of certain revenue and expense items:

	 	•	 	Activation fees are now classified as equipment revenue. Previously, these amounts were classified as network revenue.
	 
	 	•	 	Recoveries from new and existing subscribers from the sale of equipment are now classified as equipment revenue.
Previously, these amounts were recorded as a reduction to sales
expense in the case of a new subscriber, or as a reduction to operating,
general and administrative expense in the case of an existing subscriber.
	 
	 	•	 	Equipment subsidies provided to new and existing subscribers are now classified as a reduction to equipment revenue.
Previously, these amounts were recorded as sales expense in the case of a new subscriber or as operating, general and administrative
expense in the case of an existing subscriber. Costs for equipment provided under retention programs to existing subscribers are now
recorded as cost of equipment sales. Previously these amounts were recorded as operating, general and administrative expense.
	 
	 	•	 	Certain other recoveries from subscribers related to collections activities are now recorded as network
revenue rather than as a recovery of operating, general and administrative expenses.

     As a result of the adoption of these new accounting standards, the following changes to the
classification of revenue and expenses have been made:

	 	 	 	 	 	 	 	 	 
	 	 	2003
	 	2002

	Postpaid (voice and data) revenue:
	 	 	 	 	 	 	 	 
	Prior to adoption
	 	 	$	1,920,993	 	$	1,632,874	 
	After adoption
	 	 	 	1,911,073	 	 	1,628,095	 
	Network revenue:
	 	 	 	 	 	 	 	 
	Prior to adoption
	 	 	 	2,039,813	 	 	1,759,263	 
	After adoption
	 	 	 	2,029,893	 	 	1,754,484	 
	Equipment sales:
	 	 	 	 	 	 	 	 
	Prior to adoption
	 	 	 	242,390	 	 	206,664	 
	After adoption
	 	 	 	177,901	 	 	137,030	 
	Total operating revenue:
	 	 	 	 	 	 	 	 
	Prior to adoption
	 	 	 	2,282,203	 	 	1,965,927	 
	After adoption
	 	 	 	2,207,794	 	 	1,891,514	 
	Cost of equipment sales:
	 	 	 	 	 	 	 	 
	Prior to adoption
	 	 	 	244,479	 	 	209,948	 
	After adoption
	 	 	 	380,771	 	 	296,794	 
	Sales and marketing expenses:
	 	 	 	 	 	 	 	 
	Prior to adoption
	 	 	 	522,716	 	 	462,784	 
	After adoption
	 	 	 	361,998	 	 	328,884	 
	Operating, general and administrative expenses:
	 	 	 	 	 	 	 	 
	Prior to adoption
	 	 	 	787,436	 	 	765,508	 
	After adoption
	 	 	 	737,453	 	 	738,149	 

             The above changes had no impact on operating income or net income (loss).

	 	(b)	 	On
February 20, 2004, the Company completed an offering of
U.S.$750.0 million aggregate
principal amount of Senior (Secured) Notes, due 2014. The Company used approximately
U.S.$734.7 million of the net proceeds to retire certain of its existing Senior Secured Notes and
Debentures and its Senior Subordinated Notes.

	 	(c)	 	On
October 8, 2004 the Company and its bank lenders entered into an amending agreement to
the Company's $700.0 million bank credit facility that provided among other things, for a two year
extension to the maturity date and the reduction schedule so that the bank credit facility now reduces by
$140.0 million on each of April 30, 2008 and April 30,
2009 with the maturity date on April 30, 2010. The
provision for early maturity in the event that the Company's
10 1/2% senior secured notes due 2006 are not
repaid (by refinancing or otherwise) on or prior to December 31, 2005 has been eliminated. In addition,
certain financial ratios to be maintained on a quarterly basis have been made less restrictive, the restriction
on the annual amount of PP&E expenditures has been eliminated and the restriction on the payment of
dividends and other shareholder distributions has been eliminated other than in the case of a default or
event of default under the terms of the bank credit facility.

	 	(d)	 	On
October 13, 2004, RCI announced the completion of its purchase
of the 48,594,172 Class B
Restricted Voting shares of RWCI owned by JVII General Partnership (""JVII''), a partnership owned by
AWE, for a cash price of $36.37 per share for a total of
approximately $1,767 million. The number of
Class B Restricted Voting shares purchased reflects the
conversion of the Class A Multiple Voting shares
owned by JVII to such Class B shares upon closing.

     With
the completion of the purchase, RCI beneficially owns 64,911,816
Class B Restricted Voting
shares, representing approximately      80.9% of the issued and
outstanding Class B Restricted Voting shares,
and 62,820,371 Class A Multiple Voting shares, representing      100%
of the issued and outstanding Class A
Multiple Voting shares, and which combined represent a total ownership position of      approximately 89.3%
of the total issued and outstanding shares of both classes of such shares of RWCI.

     RCI
funded the approximate $1,767 million cash purchase price of the
48.6 million shares of RWCI
through a $1,750 million secured      bridge financing facility of up to two years with a group of Canadian
financial institutions. The facility stipulates mandatory      repayments, subject to certain exceptions, from the
incurrence of debt or equity of RCI or the Company.

	 	(e)	 	On
August 9, 2004, a proceeding under the Class Actions Act (Saskatchewan) was brought
against the Company and other providers of wireless communications services in Canada. The proceeding
involves allegations by wireless customers of breach of contract, misrepresentation and false advertising.
The plaintiffs seek unquantified damages from the defendant wireless communications service providers.
The Company believes it has good defences to the allegations. The proceeding has not been certified as a
class action and it is too early to determine whether the proceeding will qualify for certification as a class
action.

	 	(f)	 	On
September 20, 2004, the Company announced an agreement with Microcell Telecommunications Inc. ("Microcell'') to make an all cash tender offer of $35.00 per share to acquire Microcell. The
Company completed the acquisition on November 12, 2004. The funding for this acquisition was
comprised of the utilization of the Company's cash on hand, drawdowns under the Company's committed
$700.0 million bank credit facility, and proceeds from a bridge
loan from RCI of up to $900.0 million, of
which $850.0 million has been drawn. The bridge loan has a term
of up to two years from November 9,
2004 and was made on an subordinated unsecured basis. The bridge loan
bears interest at 6% per annum
and is prepayable in whole or in part without penalty. RCI funded the
$850.0 million drawdown on the
bridge loan using cash on hand, cash received from Rogers Cable in the form of a return of capital and
cash received from Rogers Media in the form of a repayment of an intercompany advance made to Rogers
Media by RCI. Each of Rogers Cable and Rogers Media made drawdowns under its respective committed
bank credit facilities to fund the cash transfers to RCI.

     On
April 21, 2004 a proceeding was brought against Microcell and its subsidiary, Microcell Solutions
Inc. and others alleging breach of      contract, breach of confidence, misuse of confidential information,
breach of a duty of loyalty, good faith and to avoid a conflict of duty      and self interest, and conspiracy. The
plaintiff is seeking damages in the amount of $160 million. The proceeding is at an early stage.      The
Company believes it has good defences to the claim.

	 	(g)	 	On
November 12, 2004, the Company announced its intention to complete an offering of
$460.0 million 7.625% Senior (Secured) Notes Due 2011,
U.S.$550.0 million
Floating Rate Senior (Secured) Notes Due 2010, U.S.$470.0 million 7.25% Senior (Secured)
Notes Due 2012, U.S.$550.0 million 7.5% Senior (Secured) Notes
Due 2015, and U.S.$400.0 million 8.0% Senior Subordinated Notes
Due 2012.

42<PAGE>

                      ROGERS WIRELESS COMMUNICATIONS INC.
                         ------------------------------

                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                         ------------------------------

     NOTICE IS HEREBY GIVEN that the Annual Meeting (the "Meeting") of
shareholders of Rogers Wireless Communications Inc. (the "Corporation") will be
held at the Velma Rogers Graham Theatre, 333 Bloor Street East, Toronto,
Ontario, Canada on Thursday, May 27, 2004 at 10:45 a.m. (Toronto time). The
Meeting will be held for the following purposes:

1.   to receive the consolidated financial statements of the Corporation and its
     subsidiaries for the fiscal year ended December 31, 2003, together with the
     auditors' report thereon;

2.   for holders of Class A Multiple Voting Shares, to elect 13 directors of the
     Corporation and for holders of Class B Restricted Voting Shares, to elect 3
     directors of the Corporation;

3.   for holders of Class A Multiple Voting Shares, to appoint auditors and
     authorize the directors to fix their remuneration; and

4.   to transact such other business as may properly come before the meeting and
     any adjournment(s) or postponement(s) thereof.

     A Management Proxy Circular and form of proxy accompany this Notice of
Meeting.

     A proxy or other proof of share ownership may be required for admission to
the Meeting.

NOTES:

(1) At the Meeting, only holders of the Corporation's Class A Multiple Voting
    Shares and Class B Restricted Voting Shares are entitled to vote.

(2) A copy of the Corporation's 2003 Annual Report containing the consolidated
    financial statements of the Corporation and its subsidiaries for the fiscal
    year ended December 31, 2003, and the auditors' report thereon, accompanies
    this Notice of Meeting.

(3) Shareholders who are unable to attend the Meeting are kindly requested to
    specify on the appropriate enclosed form of proxy the manner in which the
    shares represented thereby are to be voted and are requested to sign, date
    and return the same (in the envelope provided for that purpose) by no later
    than 4:30 p.m. (Toronto time) on Wednesday, May 26, 2004, or if the meeting
    is adjourned or postponed, 48 hours (excluding Saturdays, Sundays or
    holidays) before the time the adjourned or postponed meeting is to be
    reconvened or held.

(4) Shareholders should take notice that the Articles of the Corporation impose
    certain restrictions on the issue and transfer of the Corporation's shares
    and the exercise of voting rights. These restrictions are detailed under the
    heading "Restrictions on the Transfer, Voting and Issue of Shares" in the
    accompanying Management Proxy Circular.

(5) On peut obtenir le texte francais de cette circulaire d'information au siege
    social de la compagnie situe au 600 de Maisonneuve ouest, Montreal, Quebec,
    H3A 3J2, ou en telephonant (514) 340-2060. Le texte francais sera aussi
    disponible a l'assemblee.

    DATED at Toronto, Ontario, this 19th day of April, 2004.

                                         BY ORDER OF THE BOARD OF DIRECTORS

                                         DAVID P. MILLER, Secretary
<PAGE>

                      ROGERS WIRELESS COMMUNICATIONS INC.

                           MANAGEMENT PROXY CIRCULAR

                     FOR THE ANNUAL MEETING OF SHAREHOLDERS
                            TO BE HELD MAY 27, 2004

                            SOLICITATION OF PROXIES

     THIS MANAGEMENT PROXY CIRCULAR (THE "INFORMATION CIRCULAR") IS FURNISHED IN
CONNECTION WITH THE SOLICITATION OF PROXIES BY THE MANAGEMENT OF ROGERS WIRELESS
COMMUNICATIONS INC. (the "Corporation") for use at the Annual Meeting of
shareholders of the Corporation (the "Meeting") to be held on Thursday, May 27,
2004, at the time and for the purposes set forth in the accompanying Notice of
Meeting and at any adjournment or postponement thereof. Holders of Class A
Multiple Voting Shares and Class B Restricted Voting Shares who are unable to be
present at the Meeting are requested to complete, sign, date and return the
enclosed form of proxy to the Secretary of the Corporation, c/o Computershare
Trust Company of Canada, 100 University Avenue, 9th Floor, Toronto, Ontario, M5J
2Y1, facsimile number (416) 263-9524 (within the Toronto area) or 1-866-249-7775
(outside the Toronto area) by 4:30 p.m. (Toronto time) on Wednesday, May 26,
2004. An addressed envelope with postage prepaid accompanies this Information
Circular and may be used for such purpose. The Corporation will bear the cost of
solicitation on behalf of management of proxies in the form furnished herewith.
THE SOLICITATION WILL BE PRIMARILY BY MAIL. HOWEVER, PROXIES MAY BE SOLICITED BY
TELEPHONE OR PERSONALLY BY DIRECTORS, OFFICERS OR DESIGNATED AGENTS OF THE
CORPORATION. THE CORPORATION WILL, UPON REQUEST, REIMBURSE BROKER-DEALERS,
BANKS, CUSTODIANS, NOMINEES AND OTHER FIDUCIARIES FOR THEIR REASONABLE EXPENSES
INCURRED IN FORWARDING PROXY MATERIAL TO BENEFICIAL OWNERS OF THE CORPORATION'S
SHARES.

                             APPOINTMENT OF PROXIES

     The persons named in the accompanying form of proxy are Edward S. Rogers,
O.C. (the Chairman of the Corporation), Edward Rogers and Melinda Rogers, each
of whom, other than Melinda Rogers, is a director of the Corporation. A
SHAREHOLDER DESIRING TO APPOINT SOME OTHER PERSON (WHO NEED NOT BE A SHAREHOLDER
OF THE CORPORATION) TO REPRESENT SUCH SHAREHOLDER AT THE MEETING MAY DO SO BY
EITHER INSERTING SUCH PERSON'S NAME IN THE BLANK SPACE PROVIDED IN THE FORM OF
PROXY OR BY COMPLETING ANOTHER APPROPRIATE FORM OF PROXY AND, IN EITHER CASE,
DELIVERING THE COMPLETED FORM OF PROXY, AT ANY TIME UP TO 4:30 P.M. (TORONTO
TIME) ON WEDNESDAY, MAY 26, 2004, TO THE SECRETARY OF THE CORPORATION, C/O
COMPUTERSHARE TRUST COMPANY OF CANADA, 100 UNIVERSITY AVENUE, 9TH FLOOR,
TORONTO, ONTARIO, M5J 2Y1, FACSIMILE NUMBER (416) 263-9524 (WITHIN THE TORONTO
AREA) OR 1-866-249-7775 (OUTSIDE THE TORONTO AREA), OR IF THE MEETING IS
ADJOURNED OR POSTPONED, 48 HOURS (EXCLUDING SATURDAYS, SUNDAYS OR HOLIDAYS)
BEFORE THE TIME THE ADJOURNED OR POSTPONED MEETING IS TO BE RECONVENED OR HELD.

                          NON-REGISTERED SHAREHOLDERS

     Only registered shareholders or the persons they appoint as their
proxyholders are permitted to attend and vote at the Meeting. However, in many
cases, shares of the Corporation beneficially owned by a holder (a
"Non-Registered Holder") are registered either:

     (a)   in the name of an intermediary that the Non-Registered Holder deals
        with in respect of the shares, such as banks, trust companies,
        securities dealers or brokers and trustees or administrators of
        self-administered RRSPs, RRIFs, RESPs and similar plans; or

     (b)   in the name of a depository (such as The Canadian Depository for
        Securities Limited).

     In accordance with the requirements of applicable securities law, the
Corporation has distributed copies of the Notice of Meeting, this Information
Circular, the form of proxy, and the 2003 Annual Report (collectively, the
"meeting materials") to depositories and intermediaries for onward distribution
to Non-Registered Holders.

     Intermediaries are required to forward meeting materials to Non-Registered
Holders unless a Non-Registered Holder has waived the right to receive them.
Very often, intermediaries will use service companies to forward the
<PAGE>

meeting materials to Non-Registered Holders. Non-Registered Holders who have not
waived the right to receive meeting materials will either:

A.  receive, as part of the meeting materials, a voting instruction form which
     must be completed, signed and delivered by the Non-Registered Holder in
     accordance with the directions provided by the intermediary on the voting
     instruction form (which may in some cases permit completion of the voting
     instruction form by telephone or through the Internet); or

B.  be given a form of proxy which has already been signed by the intermediary
     (typically by a facsimile, stamped signature), which is restricted to the
     number of shares beneficially owned by the Non-Registered Holder but which
     is otherwise uncompleted. This form of proxy need not be signed by the
     Non-Registered Holder. In this case, the Non-Registered Holder who wishes
     to submit a proxy should otherwise properly complete the form of proxy and
     deposit it as described above.

     The purpose of these procedures is to permit Non-Registered Holders to
direct the voting of the shares they beneficially own. Should a Non-Registered
Holder who receives either a proxy or a voting instruction form wish to attend
and vote at the Meeting in person (or have another person attend and vote on
behalf of the Non-Registered Holder), the Non-Registered Holder should strike
out the names of the persons named in the proxy and insert the Non-Registered
Holder's (or such other person's) name in the blank space provided or, in the
case of a voting instruction form, follow the corresponding instructions on the
form. IN EITHER CASE, NON-REGISTERED HOLDERS SHOULD CAREFULLY FOLLOW THE
INSTRUCTIONS OF THEIR INTERMEDIARIES AND THEIR SERVICE COMPANIES.

                                   REVOCATION

     The appropriate form of proxy must be signed by the shareholder, or by his
or her attorney authorized in writing, and should be dated with the date on
which it is executed. A registered shareholder who has given a proxy may revoke
it by:

     (a)   completing and signing a proxy bearing a later date and depositing it
           with Computershare Trust Company of Canada by 4:30 p.m. (Toronto
           time) on Wednesday, May 26, 2004;

     (b)   depositing an instrument in writing executed by the shareholder or by
           the shareholder's attorney authorized in writing: (i) at the
           registered office of the Corporation at any time up to and including
           the last business day preceding the day of the Meeting or any
           adjournment of the Meeting at which the proxy is to be used, or (ii)
           with the Chairman of the Meeting prior to the commencement of the
           Meeting on the day of the Meeting or any adjournment of the Meeting;
           or

     (c)   in any other manner provided by law or by the Articles of the
           Corporation.

     The revocation of a proxy will not affect any matter on which a vote has
been taken before the revocation. A Non-Registered Holder may revoke a voting
instruction form or a waiver of the right to receive meeting materials and to
vote given to an intermediary at any time by written notice to the intermediary,
except that an intermediary is not required to act on a revocation of a voting
instruction form or of a waiver of the right to receive materials and to vote
that is not received by the intermediary at least seven days prior to the
Meeting.

                             EXERCISE OF DISCRETION

     Nominees named in the accompanying form of proxy will vote or withhold from
voting the Class A Multiple Voting Shares or Class B Restricted Voting Shares
represented thereby, as the case may be, on any ballot that may be called for in
accordance with the shareholder's instructions (provided such instructions are
certain) and if such shareholder has specified a choice with respect to any
matter to be acted on at the Meeting, the shares will be voted accordingly. IN
THE ABSENCE OF SUCH INSTRUCTIONS, THE SHARES WILL BE VOTED (I) IN FAVOUR OF THE
ELECTION OF THE DIRECTORS NAMED IN THIS INFORMATION CIRCULAR UNDER THE HEADING
"ELECTION OF DIRECTORS"; AND (II) IN FAVOUR OF THE APPOINTMENT OF THE AUDITORS
NAMED IN THIS INFORMATION CIRCULAR AND THE AUTHORIZATION FOR THE DIRECTORS TO
FIX THE REMUNERATION OF THE AUDITORS. THE CLASS A MULTIPLE VOTING SHARES WILL BE
VOTED SEPARATELY IN FAVOUR OF THE ELECTION OF THE 13 DIRECTORS NAMED IN THIS
INFORMATION CIRCULAR UNDER THE HEADING "ELECTION OF DIRECTORS BY HOLDERS OF
CLASS A MULTIPLE VOTING SHARES". THE CLASS B RESTRICTED VOTING SHARES WILL BE
VOTED SEPARATELY IN FAVOUR OF THE ELECTION OF THE 3 DIRECTORS NAMED IN THIS
INFORMATION CIRCULAR UNDER THE HEADING "ELECTION OF DIRECTORS BY HOLDERS OF
CLASS B RESTRICTED VOTING SHARES". THE ACCOMPANYING FORM OF PROXY CONFERS
DISCRETIONARY AUTHORITY UPON THE PERSONS NAMED THEREIN WITH RESPECT TO VOTING ON
AMENDMENTS TO OR VARIATIONS
                                        2
<PAGE>

OF MATTERS IDENTIFIED IN THE NOTICE OF MEETING AND WITH RESPECT TO OTHER MATTERS
THAT MAY PROPERLY COME BEFORE THE MEETING. At the time of printing this
Information Circular, management knows of no such amendments, variations or
other matters to come before the Meeting but if any such amendments, variations
or other matters are properly brought before the Meeting, the persons designated
in the accompanying form of proxy will vote thereon in accordance with their
discretion.

                   SHARES ENTITLED TO BE VOTED AT THE MEETING

     The authorized capital of the Corporation consists of: (i) an unlimited
number of Class A Multiple Voting Shares, without par value; (ii) an unlimited
number of Class B Restricted Voting Shares, without par value; and (iii) an
unlimited number of First Preferred Shares, issuable in series, without par
value. As of April 19, 2004, 90,468,259 Class A Multiple Voting Shares and
52,045,907 Class B Restricted Voting Shares are issued and outstanding. The
Class A Multiple Voting Shares are convertible at any time into Class B
Restricted Voting Shares.

     Holders of the Class A Multiple Voting Shares are generally entitled to ten
votes per share. Holders of the Class B Restricted Voting Shares are generally
entitled to one vote per share other than with respect to the election of all
directors and the appointment of auditors, and are entitled, voting separately
as a class, to elect three directors of the Corporation.

     Each holder of outstanding Class A Multiple Voting Shares or Class B
Restricted Voting Shares of record as at the close of business on April 16,
2004, the record date established for notice of the Meeting and for voting in
respect of the Meeting, will be given notice of and will be entitled to vote at
the Meeting (subject to the Articles of the Corporation which provide that
holders of Class B Restricted Voting Shares shall not vote on the appointment of
auditors or the election of directors, other than the three directors to be
elected as a class by such holders), in person or by proxy, the number of shares
of record held by such shareholder on the record date. Rogers Communications
Inc. ("RCI") and JVII General Partnership (which together, own all of the issued
and outstanding Class A Multiple Voting Shares -- see below under the heading
"Principal Holders of Shares of the Corporation") have each agreed, subject to
certain exceptions not currently applicable, not to vote any Class B Restricted
Voting Shares they hold or control on the election of the three directors to be
elected by the holders of the Class B Restricted Voting Shares voting separately
as a class.

PRINCIPAL HOLDERS OF SHARES OF THE CORPORATION

     To the knowledge of the directors and officers of the Corporation, the only
persons or corporations beneficially owning, directly or indirectly, or
exercising control or direction over more than 10% of the outstanding voting
shares of the Corporation are: (i) RCI, a corporation controlled by Edward S.
Rogers, O.C., and certain corporations owned or controlled directly or
indirectly by him and trusts for the benefit of Mr. Rogers and his family; and
(ii) JVII General Partnership, a general partnership, all of the interests of
which are owned, directly or indirectly, by AT&T Wireless Services, Inc.
("AWS"). RCI, directly and indirectly, beneficially owns or controls, as of
April 19, 2004, 62,820,371 Class A Multiple Voting Shares of the Corporation,
representing 69.4% of the issued and outstanding Class A Multiple Voting Shares
and 16,317,644 Class B Restricted Voting Shares, representing 31.4% of the
issued and outstanding Class B Restricted Voting Shares, which together
represent 67.4% of the total votes attached to all voting shares of the
Corporation currently issued and outstanding. JVII General Partnership
beneficially owns or controls, as of April 19, 2004, 27,647,888 Class A Multiple
Voting Shares of the Corporation, representing 30.6% of the issued and
outstanding Class A Multiple Voting Shares and 20,946,284 Class B Restricted
Voting Shares, representing 40.3% of the issued and outstanding Class B
Restricted Voting Shares, which together represent 31.1% of the total votes
attached to all voting shares of the Corporation currently issued and
outstanding.

                    PARTICULARS OF MATTERS TO BE ACTED UPON

                             ELECTION OF DIRECTORS

     The total number of directors to be elected at the Meeting is 16. The
persons designated in the enclosed form of proxy intend to vote for the election
as directors of the proposed nominees whose names are set out below. The
Articles of the Corporation provide that holders of Class B Restricted Voting
Shares shall be entitled to elect three directors of the Corporation, voting
separately as a class, and that the holders of Class A Multiple Voting Shares
voting as a class, shall elect the remaining directors. Management does not
contemplate that any of the proposed nominees will be unable

                                        3
<PAGE>

to serve as a director but, if that should occur for any reason prior to the
Meeting, the persons designated in the enclosed form of proxy reserve the right
to vote for another nominee at their discretion. Each director elected will hold
office until his or her successor is duly elected at the next annual meeting of
the shareholders of the Corporation or unless, prior thereto, he or she resigns
or his or her office becomes vacant by reason of death or other cause under
applicable law. The board of directors (the "Board") has a number of committees,
including an Executive Committee and an Audit Committee. The members of such
committees and other committees are identified by notes following their names.

ELECTION OF DIRECTORS BY HOLDERS OF CLASS A MULTIPLE VOTING SHARES

     The following table states the names of all the persons proposed to be
nominated for election as directors by the holders of Class A Multiple Voting
Shares, their principal occupations or employments and other positions and
offices with the Corporation or any of its significant affiliates now held by
them, their periods of service as directors of the Corporation, the number of
Class A Multiple Voting Shares and Class B Restricted Voting Shares of the
Corporation and Class A Voting Shares and Class B Non-Voting Shares of RCI, the
Corporation's holding body corporate, beneficially owned or over which control
or direction is exercised by each of them as of April 19, 2004 and the
approximate number of Directors' Deferred Share Units of the Corporation
credited to the account of such person as at April 19, 2004 (see description of
the Directors' Deferred Share Unit Plan under "Other Information -- Compensation
of Directors" in this Information Circular).
<Table>
<Caption>
                                                                                  CLASS A         CLASS B
                                             PRINCIPAL OCCUPATION                MULTIPLE       RESTRICTED
                                            AND POSITION WITH THE                 VOTING          VOTING          CLASS A
                                               CORPORATION AND      DIRECTOR   SHARES OF THE   SHARES OF THE   VOTING SHARES
                   NAME                     SIGNIFICANT AFFILIATES   SINCE      CORPORATION     CORPORATION       OF RCI
                   ----                     ----------------------  --------   -------------   -------------   -------------
<S>                <C>                      <C>                     <C>        <C>             <C>             <C>
                   LEWIS M. CHAKRIN.......  Executive Vice-           2001         Nil             Nil             Nil
(LEWIS) M.                                  President, Corporate
CHAKRIN PHOTO)     (3)(6)(7)(8)             Strategy and Business
                                            Development, AT&T
                                            Wireless Services Inc.
                                            (wireless
                                            communications)
 Lewis M. Chakrin, 56, resides in Mendham, New Jersey, and has been a director of the Corporation since October, 2001. Mr.
 Chakrin is Executive Vice-President, Corporate Strategy and Business Development AT&T Wireless Services, Inc. Mr. Chakrin
 joined Bell Labs in 1969 and served as a supervisor in the Operations Research Group and the Network Architecture Planning
 Group. He joined AT&T Corporate Headquarters in 1982 and served in various capacities including Vice-President, Business
 Sales Division, Strategic Planning Vice-President, International Communications Services, Vice-President, Personal
 Communications Services, Vice-President Business Development and Corporate Strategy and Vice-President, Consumer Product
 Management. Mr. Chakrin holds a M.Sc. in Operations Research, Columbia University, and an M.B.A. and Ph.D. in Finance, New
 York University's Graduate School of Business.

<Caption>
                                   DIRECTORS'
                                    DEFERRED
                      CLASS B      SHARE UNITS
                    NON-VOTING       OF THE
                   SHARES OF RCI   CORPORATION
                   -------------   -----------
<S>                <C>             <C>
                       Nil            Nil
(LEWIS) M.
CHAKRIN PHOTO)
 Lewis M. Chakrin
 Chakrin is Execu
 joined Bell Labs
 Group. He joined
 Sales Division,
 Communications S
 Management. Mr.
 York University'
</Table>

                                        4
<PAGE>
<Table>
<Caption>
                                                                                  CLASS A         CLASS B
                                             PRINCIPAL OCCUPATION                MULTIPLE       RESTRICTED
                                            AND POSITION WITH THE                 VOTING          VOTING          CLASS A
                                               CORPORATION AND      DIRECTOR   SHARES OF THE   SHARES OF THE   VOTING SHARES
                   NAME                     SIGNIFICANT AFFILIATES   SINCE      CORPORATION     CORPORATION       OF RCI
                   ----                     ----------------------  --------   -------------   -------------   -------------
<S>                <C>                      <C>                     <C>        <C>             <C>             <C>
                   H. GARFIELD EMERSON,     National Chairman, law    1992         Nil            1,000            Nil
(H. GARFIELD       Q.C....................  firm of Fasken
EMERSON PHOTO)                              Martineau DuMoulin;
                   (2)(3)(4)(5)(6)(7)       Chairman of RCI and
                                            Deputy Chairman of the
                                            Corporation
 H. Garfield Emerson, Q.C., 63, resides in Toronto, Ontario and has been a director of the Corporation since April, 1992 and
 Deputy Chairman of the Board since May, 2002. Mr. Emerson is also a director of CAE Inc., Canada Deposit Insurance
 Corporation, Wittington Investments, Limited, Rogers Communications Inc., Rogers Cable Inc., Rogers Media Inc., Rogers
 Telecommunications Limited and Sunnybrook & Women's Health Sciences Centre. Mr. Emerson is the past Chair of the Sunnybrook
 & Women's Foundation and past Chair of the Campaign for Victoria University in the University of Toronto. He is a former
 director of the University of Toronto Asset Management Corporation and member of the Business Board of the University of
 Toronto. Mr. Emerson joined Fasken Martineau DuMoulin LLP, a national law firm, in August, 2001 as National Chair and a
 senior partner and leader of the firm's mergers and acquisitions practice. In 1990, Mr. Emerson established NM Rothschild &
 Sons Canada Limited, an investment banking firm affiliated with the Rothschild international investment and merchant bank
 and, from 1990 to 2001, served as its President and Chief Executive Officer. Prior to this, Mr. Emerson practiced law as a
 senior partner with Davies, Ward & Beck Toronto, from 1970 to 1990. Mr. Emerson holds an Honours B.A. (History) and LL.B.,
 University of Toronto, was called to the Bar of Ontario in 1968 and appointed Queen's Counsel in 1980.

                   ANN T. GRAHAM..........  Company Director          --           Nil             Nil             Nil
(ANN T. GRAHAM
PHOTO)             (9)
 Ann T. Graham, 60, resides in Toronto, Ontario. Ms. Graham serves as a director of Rogers Media Inc. and Sheena's Place.
 Ms. Graham is a graduate of the University of New Brunswick (Hon. B.A.). She holds a Bachelor of Education from the
 University of Toronto and a Bachelor of Fine Arts from York University.
                   THOMAS IAN HULL........  Chairman and Chief        1991         Nil            1,000          254,200
(THOMAS IAN HULL                            Executive Officer, The
PHOTO)             (3)(4)(5)(7)             Hull Group Inc.
                                            (insurance)
 Thomas I. Hull, 72, resides in Toronto, Ontario and has been a director of the Corporation since May, 1991. Mr. Hull is
 Chairman and Chief Executive Officer of The Hull Group of Companies. Mr. Hull is also a director of Rogers Communications
 Inc., Rogers Media Inc. and Rogers Telecommunications Limited Mr. Hull is a graduate of Upper Canada College and the
 Insurance Co. of North America College of Insurance and Risk Management. Mr. Hull is a life member of the Canadian
 Association of Insurance and Financial Advisors and past president of the Life Underwriters' Association of Toronto.

<Caption>
                                   DIRECTORS'
                                    DEFERRED
                      CLASS B      SHARE UNITS
                    NON-VOTING       OF THE
                   SHARES OF RCI   CORPORATION
                   -------------   -----------
<S>                <C>             <C>
                      3,265           Nil
(H. GARFIELD
EMERSON PHOTO)

 H. Garfield Emer
 Deputy Chairman
 Corporation, Wit
 Telecommunicatio
 & Women's Founda
 director of the
 Toronto. Mr. Eme
 senior partner a
 Sons Canada Limi
 and, from 1990 t
 senior partner w
 University of To
                       390            Nil
(ANN T. GRAHAM
PHOTO)
 Ann T. Graham, 6
 Ms. Graham is a
 University of To
                      9,800         1,667.42
(THOMAS IAN HULL
PHOTO)

 Thomas I. Hull,
 Chairman and Chi
 Inc., Rogers Med
 Insurance Co. of
 Association of I
</Table>

                                        5
<PAGE>
<Table>
<Caption>
                                                                                  CLASS A         CLASS B
                                             PRINCIPAL OCCUPATION                MULTIPLE       RESTRICTED
                                            AND POSITION WITH THE                 VOTING          VOTING          CLASS A
                                               CORPORATION AND      DIRECTOR   SHARES OF THE   SHARES OF THE   VOTING SHARES
                   NAME                     SIGNIFICANT AFFILIATES   SINCE      CORPORATION     CORPORATION       OF RCI
                   ----                     ----------------------  --------   -------------   -------------   -------------
<S>                <C>                      <C>                     <C>        <C>             <C>             <C>
                   KENT J. MATHY..........  Executive Vice-           2003         Nil             Nil             Nil
(KENT J. MATHY                              President, Business
PHOTO)             (5)(8)                   Market Groups AT&T
                                            Wireless Services,
                                            Inc. (wireless
                                            communications)
 Kent J. Mathy, 44, resides in Kenilworth, Illinois, and has been a director of the Corporation since October, 2003. Mr.
 Mathy is Executive Vice-President, Business Market Groups, AT&T Wireless Services, Inc. Previously Mr. Mathy served as
 Chairman, President and Chief Executive Officer, Celox Networks. Prior to joining Celox, Mr. Mathy served with AT&T,
 holding numerous management positions nationwide over a period of 18 years. Mr. Mathy holds a Bachelor of Business
 Administration, Marketing, University of Wisconsin-Oshkosh, 1981, and attended the University of Michigan, Executive
 Programme, 1993.

                   NADIR H. MOHAMED,        President and Chief,      2001         Nil             Nil             Nil
(NADIR H. MOHAMED  C.A....................  Executive Officer of
PHOTO)                                      the Corporation
                   (3)
 Nadir H. Mohamed, 48, resides in Toronto, Ontario, and has been a director of the Corporation since June, 2001. Mr. Mohamed
 is President and Chief Executive Officer of the Corporation. Prior to joining the Corporation, Mr. Mohamed served as Senior
 Vice-President, Marketing and Sales, Telus Communications Inc., held several senior financial, strategic business
 development and operational management positions at both BC Tel and BC Tel Mobility and served as President and Chief
 Operating Officer, BC Tel Mobility. Mr. Mohamed is a director of Sierra Wireless, Inc. and Cinram International Inc. Mr.
 Mohamed holds an undergraduate degree from the University of British Columbia and received his C.A. designation in 1980.

                   THE HONOURABLE           Senior partner in law     1991         Nil            2,000            Nil
(DAVID ROBERT      DAVID ROBERT PETERSON,   firm of Cassels Brock
PETERSON PHOTO)    P.C., Q.C..............  & Blackwell
                   (2)
 The Hon. David R. Peterson, P.C., Q.C., 60, resides in Toronto, Ontario and has been a director of the Corporation since
 May, 1991. Mr. Peterson is a senior partner and Chairman of Cassels Brock & Blackwell LLP and Chairman of Cassels Pouliot
 Noriega, an international affiliation of Toronto, Montreal and Mexico City law firms. Mr. Peterson was elected as a Member
 of the Ontario Legislature in 1975 and became the Leader of the Ontario Liberal party in 1982. He served as Premier of
 Ontario between 1985 and 1990. Mr. Peterson is also a director of a number of boards that includes Ivanhoe Cambridge
 Shopping Centres Limited, Industrielle Alliance Assurance Company and National Life Assurance Company of Canada, Rogers
 Communications Inc. and BNP Paribas. Mr. Peterson holds a B.A. and LL.B., University of Toronto, was called to the Bar of
 Ontario in 1969, appointed Queen's Counsel in 1980, and summoned by Her Majesty to the Privy Council in 1992.

<Caption>
                                   DIRECTORS'
                                    DEFERRED
                      CLASS B      SHARE UNITS
                    NON-VOTING       OF THE
                   SHARES OF RCI   CORPORATION
                   -------------   -----------
<S>                <C>             <C>
                       Nil            Nil
(KENT J. MATHY
PHOTO)

 Kent J. Mathy, 4
 Mathy is Executi
 Chairman, Presid
 holding numerous
 Administration,
 Programme, 1993.
                       Nil            Nil
(NADIR H. MOHAMED
PHOTO)

 Nadir H. Mohamed
 is President and
 Vice-President,
 development and
 Operating Office
 Mohamed holds an
                      1,000         2,433.18
(DAVID ROBERT
PETERSON PHOTO)

 The Hon. David R
 May, 1991. Mr. P
 Noriega, an inte
 of the Ontario L
 Ontario between
 Shopping Centres
 Communications I
 Ontario in 1969,
</Table>

                                        6
<PAGE>
<Table>
<Caption>
                                                                                  CLASS A         CLASS B
                                             PRINCIPAL OCCUPATION                MULTIPLE       RESTRICTED
                                            AND POSITION WITH THE                 VOTING          VOTING          CLASS A
                                               CORPORATION AND      DIRECTOR   SHARES OF THE   SHARES OF THE   VOTING SHARES
                   NAME                     SIGNIFICANT AFFILIATES   SINCE      CORPORATION     CORPORATION       OF RCI
                   ----                     ----------------------  --------   -------------   -------------   -------------
<S>                <C>                      <C>                     <C>        <C>             <C>             <C>
                   JORDAN M. RODERICK.....  President,                2000         Nil             Nil             Nil
(JORDAN M.                                  International, AT&T
RODERICK PHOTO)    (3)(4)(6)(7)(8)          Wireless Services,
                                            Inc. (wireless
                                            communications)
 Jordan Roderick, 46, resides in Redmond, Washington and has been a director of the Corporation since April, 2000. Mr.
 Roderick is President, International, AT&T Wireless Services, Inc. Prior to his current position, Mr. Roderick was
 Executive Vice-President Wireless Technology and Products and served in a variety of roles with LIN, McCaw Cellular and
 AT&T Wireless Services, Inc., including Executive Vice-President, Cellular One in New York and Vice-President, Products
 Development, AT&T Wireless Services, Inc. Mr. Roderick serves as a director of Rogers Wireless Inc. and PrairieComm, Inc.
 Mr. Roderick holds a B.A. and M.B.A. from Dartmouth College.

                   EDWARD SAMUEL ROGERS,    Chairman of the           1991      62,820,371      16,317,644     51,116,099
(EDWARD SAMUEL     O.C....................  Corporation
ROGERS PHOTO)
                   (1)(3)(5)(6)(7)
 Edward S. Rogers, O.C., 70, resides in Toronto, Ontario and has been Chairman of the Corporation since May, 1991. Mr.
 Rogers is also President and Chief Executive Officer of Rogers Communications Inc. He also serves as a director of Rogers
 Communications Inc., Rogers Cable Inc., Rogers Media Inc., Rogers Telecommunications Limited, Cable Television
 Laboratories, Inc. and the Canadian Cable Television Association. Mr. Rogers holds a B.A., University of Toronto, LL.B.,
 Osgoode Hall Law School, and was called to the Bar of Ontario in 1962. Mr. Rogers was appointed an Officer of the Order of
 Canada in 1990 and inducted into the Canadian Business Hall of Fame in 1994. In 2002, Mr. Rogers was inducted into the U.S.
 Cable Hall of Fame.

                   LORETTA ANNE ROGERS....  Company Director          2003         Nil            1,000           1,000
(LORETTA ANNE
ROGERS PHOTO)      (9)
 Loretta A. Rogers, 65, resides in Toronto, Ontario. Mrs. Rogers serves as a director of Rogers Communications Inc., Rogers
 Media Inc., Rogers Telecommunications Limited and Sheena's Place. Mrs. Rogers holds a B.A., University of Miami, and an
 honourary Doctorate of Laws, University of Western Ontario.

                   MARTHA L. ROGERS.......  Company Director          --           Nil            1,000            100
(MARTHA L. ROGERS
PHOTO)             (9)
 Martha L. Rogers, 32, resides in Toronto, Ontario. Ms. Rogers serves as a director of Rogers Media Inc. Ms. Rogers holds a
 B.A., University of Western Ontario and is currently completing her internship at the Canadian College of Naturopathic
 Medicine.

<Caption>
                                   DIRECTORS'
                                    DEFERRED
                      CLASS B      SHARE UNITS
                    NON-VOTING       OF THE
                   SHARES OF RCI   CORPORATION
                   -------------   -----------
<S>                <C>             <C>
                       Nil            Nil
(JORDAN M.
RODERICK PHOTO)
 Jordan Roderick,
 Roderick is Pres
 Executive Vice-P
 AT&T Wireless Se
 Development, AT&
 Mr. Roderick hol
                   18,614,690         Nil
(EDWARD SAMUEL
ROGERS PHOTO)
 Edward S. Rogers
 Rogers is also P
 Communications I
 Laboratories, In
 Osgoode Hall Law
 Canada in 1990 a
 Cable Hall of Fa
                     34,265           320.11
(LORETTA ANNE
ROGERS PHOTO)
 Loretta A. Roger
 Media Inc., Roge
 honourary Doctor
                       100            Nil
(MARTHA L. ROGERS
PHOTO)
 Martha L. Rogers
 B.A., University
 Medicine.
</Table>

                                        7
<PAGE>
<Table>
<Caption>
                                                                                  CLASS A         CLASS B
                                             PRINCIPAL OCCUPATION                MULTIPLE       RESTRICTED
                                            AND POSITION WITH THE                 VOTING          VOTING          CLASS A
                                               CORPORATION AND      DIRECTOR   SHARES OF THE   SHARES OF THE   VOTING SHARES
                   NAME                     SIGNIFICANT AFFILIATES   SINCE      CORPORATION     CORPORATION       OF RCI
                   ----                     ----------------------  --------   -------------   -------------   -------------
<S>                <C>                      <C>                     <C>        <C>             <C>             <C>
                   G. MICHAEL SIEVERT.....  Executive Vice            2002         Nil             Nil             Nil
(G. MICHAEL                                 President and Chief
SIEVERT PHOTO)     (5)(8)                   Marketing Officer,
                                            AT&T Wireless
                                            Services, Inc.
                                            (wireless
                                            communications)
 G. Michael Sievert, 34, resides in Yarrow Point, Washington and has been a director of the Corporation since October, 2002.
 Mr. Sievert is Executive Vice-President and Chief Marketing Officer, AT&T Wireless Services, Inc. , a position he has held
 since March, 2002. Previously, Mr. Sievert served as Chief Marketing and Sales Officer, E*TRADE Group, Inc. and has held
 executive positions with IBM and Proctor & Gamble. Mr. Sievert holds a B.Sc. in Economics, The Wharton School, University
 of Pennsylvania.

                   JOHN CHRISTOPHER         Chairman, Rogers          2003         Nil             2000            Nil
(JOHN CHRISTOPHER  COUNSEL WANSBROUGH.....  Telecommunications
PHOTO)                                      Limited (holding
                   (2)(3)(7)                company)
 J. Christopher C. Wansbrough, 71, resides in Toronto, Ontario. Mr. Wansbrough is Chairman, Rogers Telecommunications
 Limited and has held that position since December, 1997. Mr. Wansbrough serves as a director of Rogers Communications Inc.,
 Rogers Cable Inc., Rogers Media Inc. and United Corporations Ltd. Mr. Wansbrough has also served as President of National
 Trust Company and Chairman of the Board of Omers Realty Corporation. Other affiliations include Chairman of the Board of
 the R.S. McLaughlin Foundation and the Independent Order of Foresters. Mr. Wansbrough holds a B.A., University of Toronto,
 and is a Chartered Financial Analyst.

<Caption>
                                   DIRECTORS'
                                    DEFERRED
                      CLASS B      SHARE UNITS
                    NON-VOTING       OF THE
                   SHARES OF RCI   CORPORATION
                   -------------   -----------
<S>                <C>             <C>
                       Nil            Nil
(G. MICHAEL
SIEVERT PHOTO)
 G. Michael Sieve
 Mr. Sievert is E
 since March, 200
 executive positi
 of Pennsylvania.
                      2,665           Nil
(JOHN CHRISTOPHER
PHOTO)
 J. Christopher C
 Limited and has
 Rogers Cable Inc
 Trust Company an
 the R.S. McLaugh
 and is a Charter
</Table>

NOTES:

(1) Further details concerning these and other holdings are described above
    under the heading "Principal Holders of Shares of the Corporation".

(2) Denotes member of the Audit Committee of the Corporation.

(3) Denotes member of Executive Committee of the Corporation.

(4) Denotes member of Compensation Committee of the Corporation.

(5) Denotes member of Nominating and Corporate Governance Committee of the
    Corporation.

(6) Denotes member of Technology Committee of the Corporation.

(7) Denotes member of Finance Committee of the Corporation.

(8) In 1999, the Corporation, RCI and JVII General Partnership entered into a
    number of agreements, including a shareholders' agreement which provides
    for, among other things, the grant by RCI of certain governance rights in
    favour of JVII General Partnership with respect to the Corporation so long
    as JVII General Partnership holds at least 20% of the equity shares of the
    Corporation, including the ability to nominate four directors to the Board
    of Directors of the Corporation. Messrs. Chakrin, Mathy, Roderick and
    Sievert have been nominated for election as directors pursuant to the
    shareholders' agreement.

(9) Loretta Anne Rogers is the spouse of Edward S. Rogers. Martha Rogers is the
    daughter of Edward S. Rogers and Loretta Anne Rogers. Ann Graham is the
    sister of Edward S. Rogers.

     Other than Ann Graham and Martha Rogers, all nominees listed in the table
above are now directors of the Corporation and have been directors since the
dates indicated above. Information as to shares beneficially owned by each
nominee or over which each nominee exercises control or direction, not being
within the knowledge of the Corporation, has been furnished by the respective
nominees individually.

ELECTION OF DIRECTORS BY HOLDERS OF CLASS B RESTRICTED VOTING SHARES

     The following table states the names of all the persons proposed to be
nominated for election as directors by the holders of Class B Restricted Voting
Shares, their principal occupations or employments, their periods of service as
directors of the Corporation, the number of Class A Multiple Voting Shares and
Class B Restricted Voting Shares of the Corporation and Class A Voting Shares
and Class B Non-Voting Shares of RCI, the Corporation's holding body

                                        8
<PAGE>

corporate, beneficially owned or controlled by each of them as of April 19, 2004
and the approximate number of Directors' Deferred Share Units of the Corporation
credited to the account of such person as at April 19, 2004:
<Table>
<Caption>
                                                                                           CLASS A         CLASS B
                                                                                          MULTIPLE       RESTRICTED     CLASS A
                                                PRINCIPAL OCCUPATION AND                   VOTING          VOTING       VOTING
                                              POSITION WITH THE CORPORATION  DIRECTOR   SHARES OF THE   SHARES OF THE   SHARES
                   NAME                        AND SIGNIFICANT AFFILIATES     SINCE      CORPORATION     CORPORATION    OF RCI
                   ----                       -----------------------------  --------   -------------   -------------   -------
<S>                <C>                        <C>                            <C>        <C>             <C>             <C>

                   GEORGE ALFRED              President, Four Halls Inc.       1991         Nil            2,000         7,000
(GEORGE ALFRED     FIERHELLER...............  (investment and consulting)
FIERHELLER PHOTO)
                   (1)(2)(4)
 George A. Fierheller, 70, resides in Toronto, Ontario, and has been a director of the Corporation since May, 1991. Mr.
 Fierheller is President, Four Halls Inc. and served with IBM prior to founding Systems Dimensions Limited in 1968. Mr.
 Fierheller was appointed President and Chief Executive Officer, Premier Cablesystems Limited in 1979, Vice-Chairman of the
 merged Rogers Cablesystems Inc. in 1980 and Chairman and Chief Executive Officer of Rogers Wireless Mobile Communications Inc.
 in 1989. Mr. Fierheller is a director of Extendicare Inc., the Sunnybrook & Women's Hospital Foundation, the Council for
 Business and the Arts in Canada, the Canadian Institute for Advanced Research and the Greater Toronto Marketing Alliance. Mr.
 Fierheller holds an Honours Degree (Political Science and Economics), University of Toronto, 1955. Mr. Fierheller was
 appointed a Member of The Order of Canada in 2000.

                   JAMES C. GRANT...........  President, C.G. James &          1992         Nil            5,000         Nil
JAMES C. GRANT                                Associates (consulting)
PHOTO)             (1)(3)
 James C. Grant, 67, resides in Oakville, Ontario, and has been a director of the Corporation since April, 1992. Mr. Grant is
 President, C.G. James & Associates. Previously, Mr. Grant held senior positions with the Royal Bank of Canada, including
 Deputy Head of the Retail Division responsible for Strategic Planning and Executive Vice-President, Systems and Technology.
 Mr. Grant serves as a director of AgoraeGlobal, U.S.A. and Secure Electrans Limited (U.K.). Mr. Grant represented Canada in a
 number of international associations including the Business Industry Advisory Committee to the O.E.C.D., the International
 Chamber of Commerce on Information Systems and the Telecommunications and Computer Services Sectoral Advisory group on
 International Trade, Government of Canada (NAFTA). Mr. Grant holds a B.Eng., Technical University of Nova Scotia.

                   PIERRE L. MORRISSETTE....  President and Chief Executive    1991         Nil            1,000         Nil
(PIERRE L.                                    Officer, Pelmorex Inc.
MORRISSETTE        (1)(5)                     (broadcasting)
PHOTO)
 Pierre L. Morrissette, 57, resides in Oakville, Ontario and has been a director of the Corporation since May, 1991. Mr.
 Morrissette serves as Chairman, President and Chief Executive Officer of Pelmorex Inc. Mr. Morrissette previously served as
 President and Chief Executive Officer, Canadian Satellite Communications Inc., Chairman and Chief Executive Officer, CI Cable
 Systems, Senior Vice-President and Chief Financial Officer, Telemedia Communications Inc., President, Gasbeau Investments and
 President, Telemedia Enterprises. Mr. Morrissette serves on the Advisory Boards of The Richard Ivey School of Business and
 Meteorological Services of Canada, Environment Canada. Mr. Morrissette holds a B.A. (Economics), Loyola of Montreal, and an
 M.B.A., University of Western Ontario.

<Caption>
                                   DIRECTORS'
                                    DEFERRED
                      CLASS B      SHARE UNITS
                    NON-VOTING       OF THE
                   SHARES OF RCI   CORPORATION
                   -------------   -----------
<S>                <C>             <C>
                      20,000       5,609.08
(GEORGE ALFRED
FIERHELLER PHOTO)
 George A. Fierhe
 Fierheller is Pr
 Fierheller was a
 merged Rogers Ca
 in 1989. Mr. Fie
 Business and the
 Fierheller holds
 appointed a Memb
                         Nil            Nil
JAMES C. GRANT
PHOTO)
 James C. Grant,
 President, C.G.
 Deputy Head of t
 Mr. Grant serves
 number of intern
 Chamber of Comme
 International Tr
                      Nil               Nil
(PIERRE L.
MORRISSETTE
PHOTO)
 Pierre L. Morris
 Morrissette serv
 President and Ch
 Systems, Senior
 President, Telem
 Meteorological S
 M.B.A., Universi
</Table>

NOTES:

(1) Denotes member of the Audit Committee of the Corporation.

(2) Denotes member of the Compensation Committee of the Corporation.

                                        9
<PAGE>

(3) Denotes member of the Technology Committee of the Corporation.

(4) Denotes member of the Nominating and Corporate Governance Committee.

(5) Mr. Morrissette is the controlling shareholder of Pelmorex Inc.
    ("Pelmorex"), a broadcasting company whose most important asset is The
    Weather Network, a Canadian specialty programming service. Rogers Cable
    Communications Inc., a company affiliated with the Corporation, distributes
    The Weather Network as part of its basic cable television service. Pursuant
    to Canadian Radio-television and Telecommunications Commission regulations,
    Rogers Cable Communications Inc. is not permitted to distribute The Weather
    Network as a discretionary service without The Weather Network's written
    consent. Distribution arrangements have been covered by an Affiliation
    Agreement between Rogers Cable Communications Inc. and The Weather Network
    similar to agreements entered into between The Weather Network and other
    cable companies. In 2003, Rogers Cable Communications Inc. paid $6,242,473
    to Pelmorex for distribution of The Weather Network, which represented
    approximately 14.4% of the total revenues for Pelmorex.

     All nominees listed in the table above are now directors of the Corporation
and have been directors since the dates indicated above. Information as to
shares beneficially owned by each nominee or over which each nominee exercises
control or direction, not being within the knowledge of the Corporation, has
been furnished by the respective nominees individually.

                    APPOINTMENT AND REMUNERATION OF AUDITORS

     The persons named in the enclosed form of proxy intend to vote for the
re-appointment of KPMG LLP as auditors of the Corporation to hold office until
the next annual meeting of shareholders and to authorize the directors to fix
their remuneration. KPMG LLP has served as auditors of the Corporation since
1991. Only holders of Class A Multiple Voting Shares are entitled to vote on the
appointment of auditors. The resolution appointing KPMG LLP as the auditors and
authorizing the directors to fix their remuneration will be passed if a majority
of the votes cast is in favour of such resolution.

     The following table presents fees for professional services rendered by
KPMG LLP to the Corporation for the audit of the Company's annual financial
statements for 2003 and 2002, and fees billed for other services rendered by
KPMG LLP.

<Table>
<Caption>
                                                               2003       2002
                                                              -------    -------
                                                                ($)        ($)
<S>                                                           <C>        <C>
Audit fees..................................................  520,500    423,000
Audit related fees (1)......................................   38,956     10,500
Tax fees (2)................................................   73,680     46,810
All other fees (3)..........................................   30,000     64,300
                                                              -------    -------
Total.......................................................  663,136    544,610
                                                              -------    -------
</Table>

(1) Audit related fees consist principally of regulatory audits and other
    specified procedures audits.

(2) Tax fees consist of fees for tax consultation and compliance services.

(3) All other fees consist principally of fees for services related to French
    translation.

            RESTRICTIONS ON THE TRANSFER, VOTING AND ISSUE OF SHARES

RESTRICTIONS

     In order to ensure that the Corporation and any Canadian corporation in
which the Corporation has a direct or indirect interest remains qualified to
hold or obtain any licence required to carry on a cellular radio, PCS, paging or
similar undertaking and to ensure that the Corporation and any Canadian
corporation in which the Corporation has an interest is not in breach of any
applicable prescribed law of Canada or a province or any licences issued to it
or to any Canadian subsidiary, associate or affiliate of it under such law, the
Articles of the Corporation impose certain restrictions on the issue and
transfer of the Corporation's shares and the exercise of voting rights attached
thereto. A copy of the full text of such constraints may be obtained from the
Secretary of the Corporation.

     The cellular, PCS and paging licenses held by the Corporation's wholly
owned subsidiary, Rogers Wireless Inc., include a condition requiring the
licensed carrier company to comply with the ownership restrictions set out in
the Telecommunications Act and the Radiocommunication Act. A maximum level of
20% of the issued voting shares of the licensed carrier company may be owned by
persons who are not Canadians. In addition, at least 80% of the members of the
board of directors of the licensed carrier company must be Canadian. Pursuant to
regulations promulgated under the Telecommunications Act and the
Radiocommunication Act, a parent holding corporation (such as the Corporation)
may

                                        10
<PAGE>

have up to 33 1/3% of its voting shares owned by non-Canadians. Neither the
licensed carrier company nor the parent corporation can be otherwise controlled
by non-Canadians.

     The Corporation is required to limit the ownership of the Corporation's
voting shares, which include only the Class A Multiple Voting Shares, by persons
who are not Canadians to a maximum of 33 1/3% of total issue. The Class B
Restricted Voting Shares are not voting shares for the purposes of the
Telecommunications Act and the Radiocommunication Act. Accordingly, the issue
and transfer of the Class B Restricted Voting Shares is not constrained by the
Articles. However, the Corporation will apply the constraints in the Articles to
ensure that no more than 33 1/3% of the Class A Multiple Voting Shares are
beneficially owned by non-Canadians.

     On November 19, 2002, the Minister of Industry announced that the
Government of Canada would review the restrictions on foreign ownership
applicable to the telecommunications sector. In February, 2003, Rogers Wireless
Inc. appeared before the Parliamentary Standing Committee on Industry, Science
and Technology and filed a brief in support of elimination of the restrictions.
A similar submission had been made by RCI, in February of 2002 to the Standing
Committee on Canadian Heritage urging the removal of restrictions on foreign
ownership applicable to cable television companies. On April 28, 2003, the
Standing Committee on Industry, Science and Technology released a report to
Parliament in which it recommended the removal of all Canadian ownership
requirements applicable to telecommunications common carriers, which would
include wireless carriers such as Rogers Wireless Inc. and entities such as the
Corporation that have a direct or indirect interest in such carriers. This
report also recommended that any changes made to the Canadian ownership
requirements for telecommunications common carriers be extended to cable
television companies, such as Rogers Cable Communications Inc., an affiliate of
the Corporation. However, a second report issued by the Standing Committee on
Canadian Heritage in June, 2003, has expressed concerns that changes in
ownership restrictions for either telecommunications common carriers or cable
television companies could have an adverse impact on the Canadian broadcasting
system. Given these conflicting reports, the Government of Canada has indicated
that it will try to reconcile the conflicting recommendations prior to taking
any legislative action. This reconciliation process is currently underway. It is
not yet known whether the Government of Canada will decide to amend the
telecommunications legislation to relax or eliminate the restrictions on
wireless carriers such as Rogers Wireless Inc.

         TAKE-OVER BID PROTECTION FOR CLASS B RESTRICTED VOTING SHARES

     Under applicable Canadian law, an offer to purchase Class A Multiple Voting
Shares would not necessarily require that an offer be made to purchase Class B
Restricted Voting Shares. In compliance with the rules of the Canadian stock
exchanges, RCI and JVII General Partnership, being the holders of all of the
outstanding Class A Multiple Voting Shares (the "Multiple Voting Shareholders"),
have each entered into agreements (the "Trust Agreements") with CIBC Mellon
Trust Company (the "Trustee") and the Corporation in order to provide the
holders of the Class B Restricted Voting Shares with certain rights in the event
of a take-over bid for Class A Multiple Voting Shares. A take-over bid,
generally defined, is an offer to acquire outstanding equity or voting shares
where, as a result thereof, the offeror would own more than 20% of the shares of
the class.

     The Trust Agreements operate by reference to Ontario securities legislation
in effect from time to time and, based upon the application of existing Ontario
securities legislation, would prevent the sale of Class A Multiple Voting Shares
owned, directly or indirectly, by the Multiple Voting Shareholders pursuant to a
take-over bid, at a price per share in excess of 115% of the market price of the
Class B Restricted Voting Shares as determined under such legislation
(generally, the twenty day average trading price of such shares prior to a bid).
This prohibition will not apply if: (a) such sale is made pursuant to an offer
to purchase Class A Multiple Voting Shares made to all holders of Class A
Multiple Voting Shares and an offer identical in all material respects is made
concurrently to purchase Class B Restricted Voting Shares, which identical offer
has no condition attached other than the right not to take-up and pay for the
shares tendered if no shares are purchased pursuant to the offer for Class A
Multiple Voting Shares; or (b) there is a concurrent unconditional offer to
purchase all of the Class B Restricted Voting Shares at a price per share at
least as high as the highest price per share paid pursuant to the take-over bid
for the Class A Multiple Voting Shares. The Trust Agreement entered into by RCI
will not prevent certain indirect sales resulting from the acquisition of shares
of a corporation which, directly or indirectly, controls, or is controlled by
RCI or the Corporation where the transferor and transferee are members of the
Rogers Family and the sale is otherwise made in accordance with applicable law.
Indirect sales within the Rogers Family between issue of Mr. Rogers (other than
from parent to child) are not excluded from the operation of the Trust
Agreements. The phrase "Rogers Family" is defined to mean (i) Edward S. Rogers,
(ii) his

                                        11
<PAGE>

spouse, (iii) any issue of Mr. Rogers, (iv) his estate, (v) any trust primarily
for the issue of Mr. Rogers, spouses of such issue, Mr. Rogers himself or his
spouse, and (vi) any and all corporations of which more than 90% of the voting
shares and all of the participating shares are directly or indirectly owned by
one or more of the foregoing. In addition, any transfer by JVII General
Partnership of Class A Multiple Voting Shares to AWS, or to an affiliate of AWS
or to a person or company owned 50% by each of AWS or its respective affiliates,
is not prevented by the Trust Agreement entered into by JVII General Partnership
provided that the transferee agrees to become a party to the Trust Agreement.

     Under the Trust Agreements, if any person acquires 20% or more of the Class
B Non-Voting Shares of RCI by means of a take-over bid, such acquisition will
not constitute a take-over bid for Class A Multiple Voting Shares for purposes
of the Trust Agreements. In addition, if the net book value of the Corporation
multiplied by RCI's or JVII General Partnership's percentage interest therein is
not greater than 80% of the net book value of RCI or JVII General Partnership,
respectively, on a consolidated basis, then, for the purposes of the Trust
Agreements, a take-over bid for RCI or JVII General Partnership, respectively,
will not be deemed to be a take-over bid for the Class A Multiple Voting Shares.

     Under the Trust Agreements, any disposition of shares (including a transfer
to a pledgee as security) by the Multiple Voting Shareholders or any person or
company which they control is conditional upon such person or company becoming a
party to an agreement on substantially similar terms and conditions as are
contained in the Trust Agreements.

     The Trust Agreements provide that if a person or company carries out an
indirect sale in respect of any Class A Multiple Voting Shares in contravention
of the Trust Agreements and, following such sale, such Class A Multiple Voting
Shares are owned by the Multiple Voting Shareholder, the Multiple Voting
Shareholder shall not from the time such sale becomes effective and thereafter:
(a) dispose of any such Class A Multiple Voting Shares or convert them into
Class B Restricted Voting Shares, in either case without the prior written
consent of the Trustee; or (b) exercise any voting rights attaching to such
Class A Multiple Voting Shares except in accordance with the written
instructions of the Trustee. The Trustee may attach conditions to any consent
the Trustee gives in exercising its rights thereunder and shall exercise such
rights in a manner that the Trustee considers to be: (i) in the best interests
of the holders of the Class B Restricted Voting Shares, other than the Multiple
Voting Shareholders and holders who, in the opinion of the trustee, participated
directly or indirectly in the transaction that triggered the operation of this
provision; and (ii) consistent with the intentions of the Multiple Voting
Shareholders and the Corporation in entering into the Trust Agreements.

     The Trust Agreements contain provisions for the authorization of action by
the Trustee to enforce the rights thereunder on behalf of the holders of the
Class B Restricted Voting Shares. The obligation of the Trustee to take such
action will be conditional on the Corporation or holders of the Class B
Restricted Voting Shares providing such funds and indemnity as the Trustee may
require. No holder of Class B Restricted Voting Shares will have the right,
other than through the Trustee, to institute any action or proceeding or to
exercise any other remedy to enforce any rights arising under the Trust
Agreements unless the Trustee fails to act on a request authorized by holders of
not less than 10% of the outstanding Class B Restricted Voting Shares after
provision of reasonable funds and indemnity to the Trustee.

     The Trust Agreements provide that they may not be amended, and no provision
thereof may be waived, except with the approval of at least two-thirds of the
votes cast by the holders of Class B Restricted Voting Shares present or
represented at a meeting duly called for the purpose of considering such
amendment or waiver which two-thirds majority shall include a simple majority of
the votes cast by holders of Class B Restricted Voting Shares excluding the
Shareholders and their affiliates and any persons who have an agreement to
purchase Class A Multiple Voting Shares on terms which would constitute a sale
for purposes of the Trust Agreements other than as permitted thereby prior to
giving effect to such amendment or waiver.

     No provision of the Trust Agreements shall limit the rights of any holder
of Class B Restricted Voting Shares under applicable securities legislation.

                                        12
<PAGE>

                               OTHER INFORMATION

COMPENSATION OF DIRECTORS

     In the year ended December 31, 2003, directors were compensated for their
services with a retainer of $15,000 per annum and $1,000 per meeting attended,
$1,250 per meeting attended for directors travelling more than 100 km but less
than 1,000 km to the meeting and $2,000 for directors travelling more than 1,000
km to the meeting. Directors fees are not paid to directors who are also
Executive Officers of the Corporation. Directors who are also directors of RCI
are paid only $1,000 per meeting attended. A director who acts as Chairperson of
a Committee of the Board is paid an additional $5,000 per annum and receives
$1,500 per meeting of such Committee attended.

     A revised compensation structure for directors for 2004 has been approved
by the Board. Effective January 1, 2004, the annual retainer for each member of
the Board of Directors, excluding the Chairman and Vice-Chairman of the Board
and directors who are officers or employees of the Corporation or its affiliates
or who are directors of RCI, increased to $25,000. Directors who are also
directors of RCI, but not officers or employees of RCI or its subsidiaries, are
entitled to an annual retainer of $10,000 from the Corporation and to receive
regular board and committee attendance fees for attending meetings of the
Corporation. The annual committee retainers for the Chairpersons of the Audit
and Compensation Committees were increased to $10,000. For Chairpersons of other
committees of the Board, the annual retainers will remain unchanged at $5,000.
Meeting fees for the Chairpersons of the Audit and Compensation Committees were
increased to $3,000 and remain at $1,500 for other committee Chairpersons.
Meeting fees were also increased for members of the Audit Committee to $1,500
per meeting, $1,750 for directors travelling more than 100 km but less than
1,000 km, and $2,000 for directors travelling more than 1,000 km. Meeting fees
remain unchanged for members of other committees at $1,000, $1,250 and $2,000,
respectively. Directors do not receive compensation to prepare for board or
committee meetings of the Corporation.

     To encourage the directors to align their interests with shareholders, the
Corporation implemented a Directors' Deferred Share Unit Plan (the "DDSU Plan")
in December, 1999 applicable to the fiscal year commencing January 1, 2000 and
subsequent fiscal years. Under the DDSU Plan, non-employee directors may receive
all or a percentage of their total directors' fees in the form of Directors'
Deferred Share Units ("DDSUs"), each of which has a value equal to the market
value of a Class B Restricted Voting Share at the commencement of the relevant
fiscal quarter. A DDSU is a bookkeeping entry credited to the account of an
individual director, which cannot be converted to cash until the director ceases
to be a member of the Board of Directors of the Corporation and its
subsidiaries. The value of a DDSU, when converted to cash, will be equivalent to
the market value of a Class B Restricted Voting Share at the time the conversion
takes place. DDSUs will attract dividends in the form of additional DDSUs at the
same rate as dividends on Class B Restricted Voting Shares.

     In October, 2002, the Board passed a resolution requiring each non-employee
director to acquire direct or indirect beneficial ownership of 4,000 of any
combination of Class A Multiple Voting Shares, Class B Restricted Voting Shares
and DDSUs during his or her term of service as a director of the Corporation,
RCI, Rogers Media Inc. or Rogers Cable Inc., as the case may be.

     From time to time, the directors are granted options to participate in the
stock option plans of the Corporation. Non-employee directors may receive all or
a percentage of such stock options in the form of DDSUs.

     All directors are entitled, after ten years of service, to a retiring
allowance on retirement from the Board in an amount equal to $20,000 plus $2,000
per year of service as a director.

DIRECTORS' AND OFFICERS' LIABILITY INSURANCE

     Through coverage obtained by its parent, RCI, the Corporation has the
benefit of insurance policies for itself and its directors and officers against
liability incurred by them in the performance of their duties as directors and
officers of the Corporation. The approximate amount of the premiums allocated to
the Corporation in respect of these policies on account of directors' and
officers' liability was $433,802 for the year ended December 31, 2003. The
aggregate amount of coverage under the policies in 2003 is the sum of
US$50,000,000 in respect of any one policy period. By the current terms of the
policy, in circumstances where a director or officer has a claim against the
Corporation in respect of a loss covered by the policies, arising out of a
suit(s) brought in Canada, the Corporation may claim for 100% of the loss over
and above US$500,000 and in circumstances where a director or officer has a
claim against the Corporation in respect of a loss covered by the policy arising
out of a suit(s) brought in the United States of America, the Corporation may
claim for 100% of the loss over and above US$1,000,000. In addition, where a
director or officer has a claim against

                                        13
<PAGE>

the insurers in respect of a loss covered by the policies, the director or
officer may claim on the policy for 100% of the loss with no deductible
applicable under the policies.

                             EXECUTIVE COMPENSATION

     The following table sets forth all compensation earned during the last
three fiscal years by the Chief Executive Officer and the Corporation's four
most highly compensated executive officers other than the Chief Executive
Officer who served as executive officers at the end of 2003 ("Named Executive
Officers"). All amounts were paid by the Corporation's subsidiary, Rogers
Wireless Inc.

                           SUMMARY COMPENSATION TABLE

<Table>
<Caption>
------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
                                                                                           LONG-TERM
                                                                                          COMPENSATION
                                                                                             AWARDS
                                                        ANNUAL COMPENSATION                SECURITIES
                                                                            OTHER            UNDER
                                                                            ANNUAL        OPTIONS/SARS      ALL OTHER
                                              SALARY        BONUS        COMPENSATION       GRANTED        COMPENSATION
NAME AND PRINCIPAL POSITION          YEAR       ($)          ($)            ($)(1)           (#)(2)           ($)(3)
-----------------------------------------------------------------------------------------------------------------------
<S>                                 <C>      <C>         <C>            <C>              <C>              <C>            <C>
  N.H. MOHAMED(4)................    2003     624,000     1,192,610         13,008            99,800           2,041
  President and Chief Executive      2002     600,000       683,200         11,175           --                2,041
  Officer                            2001     522,000       328,100         27,479           500,000           1,531
------------------------------------------------------------------------------------------------------------------------------
  R.W. BRUCE(5)..................    2003     367,500       551,506          6,768            58,800           1,191
  Executive Vice President, Chief    2002     350,000       558,900          8,493           --                1,191
  Marketing Officer and President,   2001      94,231       200,000         --               100,000             397
  Wireless Data Services
------------------------------------------------------------------------------------------------------------------------------
  F. FOX(6)......................    2003    370,800..      397,646          5,656            59,300           1,225
  President, Strategic Relations     2002     360,000       256,600          5,468           --                1,225
                                     2001     360,000       102,600         11,486            25,700           1,225
------------------------------------------------------------------------------------------------------------------------------
  D.E. LEVY(7)...................    2003     257,500       623,013          5,255            30,900             877
  President, Midwest Region          2002     250,000       206,875          5,501           --                  851
                                     2001     250,000       317,951         10,922            17,900             851
------------------------------------------------------------------------------------------------------------------------------
  J.S. LOVIE(8)..................    2003     350,000       406,196         --                56,000           1,134
  Executive Vice President, Sales,   2002     300,000       266,200         --               --                1,020
  Service and Distribution           2001     126,923        51,938         --               100,000             510
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
</Table>

NOTES:

(1) The value of perquisites and benefits for each Named Executive Officer does
    not exceed the lesser of $50,000 and 10% of the total of the annual salary
    and bonus and is not reported herein. The amounts quoted in this column
    represent the taxable benefits on interest free loans.

(2) The stock options granted to Messrs. Mohamed, Bruce and Lovie in 2001 are
    for Class B Non-Voting Shares of RCI. The stock options granted in 2003 to
    each Named Executive Officer are for Class B Restricted Voting Shares of the
    Corporation. The Corporation has not granted any Stock Appreciation Rights
    (SARs).

(3) The amounts quoted in this column represent premiums paid by the Corporation
    for group term life insurance for each officer.

(4) Mr. Mohamed joined the Corporation on August 14, 2000 and was appointed
    President and Chief Executive Officer of the Corporation on July 1, 2001.
    The bonus paid to Mr. Mohammed in 2003 includes a special bonus in
    furtherance of the Corporation's retention arrangements.

(5) Mr. Bruce joined the Corporation on September 17, 2001. The bonuses paid to
    Mr. Bruce in 2002 and 2003 include the forgiveness of certain indebtedness
    in furtherance of the Corporation's retention arrangements.

(6) Mr. Fox resigned on December 31, 2003.

(7) The bonus paid to Mr. Levy in 2003 includes a special bonus in furtherance
    of the Corporation's retention arrangements.

(8) Mr. Lovie joined the Corporation on July 23, 2001.

     The Corporation's executive officers are eligible for annual cash bonuses.
Annual bonus awards are based on attainment of specified performance levels,
principally related to the Corporation's achievement of targeted operating
profit levels and other financial and operating measures. Specific additional
bonus opportunities for exceptional individual or business unit success may also
be provided. Bonus criteria are set by the Compensation Committee of the Board
at the beginning of the fiscal year.

                                        14
<PAGE>

                             STOCK OPTIONS AND SAR

     The following table sets forth individual grants of stock options by the
Corporation during the last financial year to the Named Executive Officers.

          OPTION/SAR(1) GRANTS DURING THE YEAR ENDED DECEMBER 31, 2003
<Table>
<Caption>
====================================================================================

                                                   % OF TOTAL
                                                  OPTIONS/SARS
                               SECURITIES          GRANTED TO           EXERCISE
                                 UNDER            EMPLOYEES IN             OR
                              OPTIONS/SARS         FINANCIAL           BASE PRICE
NAME                         GRANTED(#)(2)            YEAR            ($/SECURITY)
------------------------------------------------------------------------------------
<S>                         <C>                 <C>                 <C>
  N.H. MOHAMED..........         61,100         9.09% 8.81%         16.88$$25.96
                                 38,700
------------------------------------------------------------------------------------
  R.W. BRUCE............    36,000 22,800       5.36% 5.19%         16.88$$25.96
------------------------------------------------------------------------------------
  F. FOX................    36,300 23,000       5.40% 5.24%         16.88$$25.96
------------------------------------------------------------------------------------
  D.E. LEVY.............    18,900 12,000       2.81% 2.73%         16.88$$25.96
------------------------------------------------------------------------------------
  J.S. LOVIE............    34,300 21,700       5.10% 4.94%         16.88$$25.96
====================================================================================

<Caption>
=========================================================================
                                 MARKET
                                 VALUE
                             OF SECURITIES
                               UNDERLYING
                              OPTIONS/SARS
                              ON THE DATE
                                OF GRANT
NAME                          ($/SECURITY)           EXPIRATION DATE
-------------------------------------------------------------------------
<S>                         <C>                 <C>
  N.H. MOHAMED..........    16.88$$25.96        April 22, 2013 November
                                                        12, 2013
-------------------------------------------------------------------------
  R.W. BRUCE............    16.88$$25.96        April 22, 2013 November
                                                        12, 2013
-------------------------------------------------------------------------
  F. FOX................    16.88$$25.96        April 22, 2013 November
                                                        12, 2013
-------------------------------------------------------------------------
  D.E. LEVY.............    16.88$$25.96        April 22, 2013 November
                                                        12, 2013
-------------------------------------------------------------------------
  J.S. LOVIE............    16.88$$25.96        April 22, 2013 November
                                                        12, 2013
=========================================================================
</Table>

NOTES:

(1) The Corporation did not grant any stock appreciation rights (SARs) to the
    Named Executive Officers during 2003.

(2) Two stock option grants were issued during 2003.

     The following table sets forth each exercise of options during the last
financial year by the Named Executive Officers.

    AGGREGATED OPTION/SAR EXERCISES DURING THE YEAR ENDED DECEMBER 31, 2003
                    AND FINANCIAL YEAR-END OPTION/SAR VALUES
<Table>
<Caption>
============================================================================
                                        SECURITIES
                                         ACQUIRED              AGGREGATE
                                        ON EXERCISE          VALUE REALIZED
NAME                                        (#)                   ($)
----------------------------------------------------------------------------
<S>                                <C>                      <C>
  N.H. MOHAMED.................          --                      --
----------------------------------------------------------------------------
  R.W. BRUCE...................          --                      --
----------------------------------------------------------------------------
  F. FOX.......................            14,000                130,410
----------------------------------------------------------------------------
  D.E. LEVY....................          --                      --
----------------------------------------------------------------------------
  J.S. LOVIE...................          --                      --
============================================================================

<Caption>
=======================================================================================
                                          UNEXERCISED             VALUE OF UNEXERCISED
                                        OPTIONS/SARS AT               IN-THE-MONEY
                                       DECEMBER 31, 2003            OPTIONS/SARS AT
NAME                               EXERCISABLE/UNEXERCISABLE      DECEMBER 31, 2003(1)
---------------------------------------------------------------------------------------
<S>                               <C>                            <C>
  N.H. MOHAMED.................      350,000/99,800(2)                   --/738,420
                                    200,000/300,000(3)                   --/--
---------------------------------------------------------------------------------------
  R.W. BRUCE...................           --/58,800(2)                   --/435,072
                                      50,000/50,000(3)                69,500/69,500
---------------------------------------------------------------------------------------
  F. FOX.......................       79,425/78,575(3)              551,241/557,836
---------------------------------------------------------------------------------------
  D.E. LEVY....................       60,494/52,350(2)              417,655/368,091
---------------------------------------------------------------------------------------
  J.S. LOVIE...................           --/56,000(2)                   --/414,484
                                      50,000/50,000(3)                69,500/69,500
=======================================================================================
</Table>

NOTES:

(1) The closing price of Class B Non-Voting shares of RCI on the Toronto Stock
    Exchange on December 31, 2003, was $21.34. The closing price of Class B
    Restricted Voting Shares of the Corporation on the Toronto Stock Exchange on
    December 31, 2003 was $27.80.

                                        15
<PAGE>

(2) Options for Class B Restricted Voting Shares of the Corporation were issued
    to Messrs. Mohamed, Bruce, Fox, Levy and Lovie from 1994 to 2003 at prices
    ranging from $15.61 to $51.53 per share.

(3) Options for Class B Non-Voting Shares of RCI were issued to Mr. Mohamed in
    2001 at a price of $22.80 per share. Options for Class B Non-Voting Shares
    of RCI were issued to Messrs. Bruce and Lovie in 2001 at a price of $19.95
    per share.

PENSION BENEFITS

     The Corporation's employees participate in the RCI pension plans. The
Corporation records its participation in the RCI pension plans as if it had a
defined contribution plan. For the year ended December 31, 2003, the Corporation
made contributions to the plans of $3.6 million, resulting in pension expense of
the same amount. The RCI pension plans cover participants across the Rogers
group of companies. The value of the accrued pension benefit obligations and the
net assets in the RCI pension plans available to provide for these benefits, at
market, were $368.2 million and $336.1 million, at the measurement date of
September 30, 2003.

     The Named Executive Officers are members of a defined benefit plan which
credits annual pension, payable at age 65, of 2% of career average earnings,
except that earnings for years before 1997 are replaced by 1997 earnings. The
pension benefits, for all officers other than Messrs. Mohamed and Fox, are
limited to maximum amounts of $1,722.22 per year of service prior to January 1,
2004 and $1,883.33 per year of service after December 31, 2003, multiplied by
years of credited service. Remuneration for pension purposes is defined as the
total of salary and commissions not including overtime, bonuses or other special
payments.

     Mr. Mohamed has a supplemental retirement plan that provides for a pension
based on 2% of his average salary and bonus during the 36 consecutive months in
which his earnings are highest. Mr. Mohamed's plan provides that the RCI pension
plan will be supplemented to match the terms and conditions of his previous
employer's pension plans.

     Mr. Fox has a supplemental retirement plan which is based on 2% of his
final five-year average base salary.

     The pensions are payable monthly for the lifetime of the Named Executive
Officers and a minimum of 60 monthly payments are guaranteed.

     The individuals covered by these arrangements, their expected years of
service to normal retirement date, and the estimated annual pension at
retirement (based on the levels of remuneration as at December 31, 2003),
including the benefits under the supplemental retirement plans described above,
are:

<Table>
<Caption>
                                                                PROJECTED     ESTIMATED
NAMED EXECUTIVE OFFICER                                          SERVICE       BENEFIT
-----------------------                                         ----------    ---------
<S>                                                             <C>           <C>
N.H. Mohamed................................................      21 years    $429,500
R.W. Bruce(1)...............................................    0.25 years    $    400
F. Fox......................................................      11 years    $ 81,700
D.E. Levy...................................................      33 years    $ 59,200
J.S. Lovie..................................................      16 years    $ 28,500
</Table>

NOTE:

(1) Mr. Bruce elected to cease participating in the RCI pension plan effective
    December 24, 2002.

EMPLOYMENT CONTRACTS

     The employment contract for each of the Named Executive Officers includes
the compensation and pension arrangements noted above.

     Mr. Mohamed's contract provides that if his employment is terminated by the
Corporation, other than for cause, he will be entitled to a lump sum equal to 24
months base salary and bonus and continued participation in RCI's pension and
benefits programs (except short term and long term disability coverage). Stock
options of the Corporation and of RCI which, in accordance with their terms,
would have become exercisable by Mr. Mohamed during the 24 months following
termination of employment shall immediately become exercisable and, together
with those stock options which have already become exercisable in accordance
with their terms, shall remain exercisable for a period of 10 years from the
date of grant in the case of the former and from the date of vesting in the case
of the latter. If there is a change of control of the Corporation or of RCI, Mr.
Mohamed may elect to resign and would be entitled to the same compensation,
pension and benefits as if his employment had been terminated by the
Corporation. Mr. Mohamed, among other things, is prohibited for a period of 12
months after termination of his employment from being involved in

                                        16
<PAGE>

any business competitive with the business being carried on by Rogers Wireless
Inc. at the time of the termination of his employment.

     Mr. Bruce's contract provides that if his employment is terminated by the
Corporation, other than for cause, he will be paid a lump sum equal to 24 months
of his base salary and bonus and his benefits (except disability benefits) will
continue for 24 months. He will also be entitled to exercise certain stock
options of the Corporation during the 24 month period following termination of
employment. Mr. Bruce is prohibited from working for any wireless service
provider in Canada during this 24 month period. If there is an ultimate change
of control of the Corporation, Mr. Bruce may elect to resign and would be
entitled to the same compensation and benefits as if his employment had been
terminated by the Corporation.

     Mr. Levy's contract provides that upon termination of his employment by the
Corporation (other than for cause) his salary and benefits (other than
disability coverage) will continue for a period of up to 12 months. Mr. Levy is
prohibited from competing with the Corporation during this 12 month period.

     Mr. Lovie's contract provides that upon termination of employment by the
Corporation, other than for cause, his salary will continue for up to 12 months.
Mr. Lovie is prohibited from competing with the Corporation during this 12 month
period.

                   COMPOSITION OF THE COMPENSATION COMMITTEE

     During the year ended December 31, 2003, the Compensation Committee of the
Corporation consisted of H. Garfield Emerson, Q.C., George A. Fierheller
(Chairman), Albert Gnat, Q.C., Thomas I. Hull, Jordan M. Roderick and Richard D.
Roberts. Mr. Emerson is Deputy Chairman of the Corporation and Chairman of RCI.
Mr. Roberts resigned on May 30, 2003 and Mr. Fierheller was appointed Chairman
on the same date.

                      REPORT ON EXECUTIVE COMPENSATION BY
                           THE COMPENSATION COMMITTEE

     The Corporation's executive compensation programme is administered by the
Compensation Committee, comprised of five members of the Board, none of whom is
a member of the Corporation's management. The Compensation Committee reviews and
recommends to the Board for approval the Corporation's executive compensation
policies and the compensation paid to the Chief Executive Officer and other
officers of the Corporation and its subsidiaries. The Compensation Committee
also reviews the design and competitiveness of the Corporation's compensation
and benefit programmes generally. The Compensation Committee met four times in
2003.

COMPENSATION PHILOSOPHY

     The Corporation's executive compensation programme is designed to provide
incentives for the enhancement of shareholder value, the successful
implementation of the Corporation's business plans and improvement in corporate
and personal performance. The programme is based on a pay-for-performance
philosophy and consists of several components: base salary, annual incentive
(bonus) paid in cash, long-term equity based incentive and other employee
benefits including the provision, in the past, of loans to employees.

     Its overall objectives are:

     (1)   to attract and retain qualified executives critical to the success of
           the Corporation,

     (2)   to provide fair and competitive compensation,

     (3)   to integrate compensation with the Corporation's business plans,

     (4)   to align the interests of management with those of shareholders, and

     (5)   to reward both business and individual performance.

     The Compensation Committee annually reviews with the Chief Executive
Officer the compensation packages and the performances of all senior executives
of the Corporation and its principal business units. The Compensation Committee
recommends to the Board for approval the salary levels, bonus potential and
entitlement and participation in equity based long-term incentives of all senior
executives.

                                        17
<PAGE>

BASE SALARY

     An executive's base salary is determined by an assessment of his/her
sustained performance and consideration of competitive compensation levels for
the markets in which the Corporation operates.

ANNUAL INCENTIVES

     The Corporation's executive officers are eligible for annual cash bonuses.
Annual bonus awards are based on attainment of specified performance levels,
principally related to the Corporation's achievement of targeted operating
income levels and specific individual and corporate objectives identified at the
beginning of the fiscal year. This establishes a direct link between executive
compensation and the Corporation's operating performance. Specific additional
bonus opportunities for exceptional individual or business unit success are also
provided and are set by the Compensation Committee at the beginning of the
fiscal year. Targeted operating income levels for the overall Corporation and
each operating division for each fiscal year are based on the budgeted operating
income, approved by the Board at the beginning of that financial year.

     An individual executive's annual incentive opportunity is established at
the beginning of a financial year. Actual bonuses are determined principally by
applying a formula based on Corporation or division performance to each
individual's bonus opportunity. Applying this formula results in payments at the
targeted opportunity level when budgeted operating income is achieved, payments
below the targeted level when operating income is below budget and payments
above the targeted level when operating income is over budget.

     Special bonuses may be paid in furtherance of retention arrangements for
key employees.

LONG-TERM INCENTIVES

     The Corporation provides a stock option plan to key employees and officers.
In prior years, the Corporation, in conjunction with RCI, has provided a
management share purchase plan to permit senior executives to acquire preferred
shares convertible into Class B Non-Voting Shares of RCI. Certain officers
participated in the RCI Stock Option Plan.

     An important objective of these plans is to encourage executives to acquire
a meaningful direct or indirect ownership interest in the Corporation over a
period of time and as a result focus executives' attention on the long-term
interests of the Corporation and its shareholders. The share purchases under the
share purchase plan are financed by the provision of non-interest bearing loans
repayable in required annual installments by the executive over ten years. The
shares held under the Plan are released to the executive only at such time and
in such proportions as the executive repays the loan. Should the executive leave
the Corporation prior to the end of the ten year period, a proportional number
of the shares are redeemed and cancelled. All stock options granted under the
stock option plans are awarded at exercise prices equal to the market price of
the shares under option at the date the option was awarded.

     In addition, the Corporation has in the past provided loans to key
employees.

CHIEF EXECUTIVE OFFICER'S COMPENSATION

     Mr. Mohamed's compensation arrangements were substantially settled prior to
his commencement of employment with the Corporation. The terms of the
arrangements were established having regard to the prevailing competitive market
situation. The terms of Mr. Mohamed's salary and target bonus were increased on
his promotion to the position of Chief Executive Officer.

     Mr. Mohamed's annual incentive was based on the Corporation's performance
against its budgeted operating income level and specific individual and
corporate objectives identified at the beginning of the fiscal year.

Submitted on behalf of the Compensation Committee

H. GARFIELD EMERSON, Q.C.
GEORGE A. FIERHELLER, CHAIRMAN
THOMAS I. HULL
JORDAN M. RODERICK

                                        18
<PAGE>

                               PERFORMANCE GRAPH

     The following graph compares the cumulative shareholder return of the Class
B Restricted Voting Shares of the Corporation ("RCM.B") with the cumulative
return of the S&P/TSX Composite Total Return Index for the five year period from
December 31, 1998 to December 31, 2003 (assuming an initial investment of $100).
The S&P/TSX Composite Total Return Index reflects the cumulative return of the
S&P/TSX Composite Index, including dividend reinvestment. Values are as at
December 31 of the specified year.

                  COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN

                                      LOGO

<Table>
<Caption>
-----------------------------------------------------------------------------------------------------------------
                                   DEC. 1998    DEC. 1999    DEC. 2000    DEC. 2001    DEC. 2002    DEC. 2003
-----------------------------------------------------------------------------------------------------------------
<S>                                <C>          <C>          <C>          <C>          <C>          <C>       <C>
RCM.B..........................     $100.00      $284.59      $142.43      $122.70      $ 75.30      $150.27
-----------------------------------------------------------------------------------------------------------------
S&P/TSX Composite
  Total Return Index...........     $100.00      $131.71      $141.47      $123.69      $108.30      $137.25
-----------------------------------------------------------------------------------------------------------------
</Table>

                                        19
<PAGE>

       INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS

     All indebtedness described below was incurred prior to July 30, 2002, the
date the United States Sarbanes-Oxley Act of 2002 came into effect. In
compliance with that legislation, no new personal loans to directors or
executive officers were made or arranged, and no existing personal loans were
renewed or modified, after July 30, 2002.

     As of April 19, 2004, the aggregate indebtedness to the Corporation or its
subsidiary, Rogers Wireless Inc., of all present or former directors, officers
and employees in connection with the purchase of securities totalled
approximately $101,233.

     The following table sets forth the particulars of the loans made by or
outstanding to the Corporation or its subsidiary, Rogers Wireless Inc., during
the year ended December 31, 2003 to present or former directors, executive
officers or senior officers of the Corporation, proposed nominees for election
as directors and associates of such persons in connection with the purchase of
securities of RCI.

             TABLE OF INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS
             AND SENIOR OFFICERS UNDER SECURITIES PURCHASE PROGRAMS
<Table>
<Caption>
======================================================================
                                                     LARGEST AMOUNT
                                                       OUTSTANDING
                                                       DURING THE
                                                     FINANCIAL YEAR
                                  INVOLVEMENT OF          ENDED
                                  CORPORATION OR    DECEMBER 31, 2003
NAME AND PRINCIPAL POSITION         SUBSIDIARY             ($)
----------------------------------------------------------------------
<S>                              <C>               <C>
  R.F. BERNER.................      Loan from             28,112
  Executive Vice President and   Corporation(1)
  Chief Technology Officer
======================================================================

<Caption>
============================================================================================
                                                         FINANCIALLY
                                                     ASSISTED SECURITIES
                                      AMOUNT          PURCHASES DURING
                                    OUTSTANDING         THE FINANCIAL
                                       AS AT             YEAR ENDED
                                  APRIL 19, 2004      DECEMBER 31, 2003       SECURITY FOR
NAME AND PRINCIPAL POSITION             ($)                  (#)              INDEBTEDNESS
--------------------------------------------------------------------------------------------
<S>                              <C>                 <C>                   <C>
  R.F. BERNER.................          Nil                  Nil            RCI Convertible
  Executive Vice President and                                             Preferred Shares
  Chief Technology Officer
============================================================================================
</Table>

NOTE:

(1) The above loan is non-interest bearing. The loan is repayable over ten years
    with mandatory repayments of 5% on the first to sixth anniversaries of the
    loan, 10% on the seventh and eighth anniversaries, 15% on the ninth
    anniversary and 35% on the tenth anniversary. At any time the borrower may
    prepay an amount equal to 10% of the principal amount for each complete year
    the loan has been outstanding less any mandatory repayments.

     As of April 19, 2004 the aggregate indebtedness to the Corporation or its
subsidiary, Rogers Wireless Inc., of all present or former officers, directors
and employees that was not entered into in connection with the purchase of
securities was approximately $1,122,915.

     The following table sets forth the particulars of loans made by or
outstanding to the Corporation or its subsidiary, Rogers Wireless Inc., that
were not provided in connection with a purchase of securities, during the year
ended December 31, 2003, to present or former directors, executive officers or
senior officers of the Corporation, proposed nominees for election as directors
and associates of such persons.

   TABLE OF INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS
                 OTHER THAN UNDER SECURITIES PURCHASE PROGRAMS
<Table>
<Caption>
=====================================================================

                                              INVOLVEMENT OF
NAME AND PRINCIPAL POSITION              CORPORATION OR SUBSIDIARY
---------------------------------------------------------------------
<S>                                   <C>
  R.W. BRUCE.....................       Loan from Corporation(1)
  Executive Vice President,
Chief Marketing Officer and
President,
Wireless Data Services
=====================================================================

<Caption>
===========================================================================================
                                            LARGEST AMOUNT
                                        OUTSTANDING DURING THE          AMOUNT OUTSTANDING
                                         FINANCIAL YEAR ENDED                 AS AT
                                          DECEMBER 31, 2003               APRIL 19, 2004
NAME AND PRINCIPAL POSITION                      ($)                           ($)
-------------------------------------------------------------------------------------------
<S>                                  <C>                             <C>
  R.W. BRUCE.....................                250,000                       125,000
  Executive Vice President,
Chief Marketing Officer and
President,
Wireless Data Services
===========================================================================================
</Table>

NOTE:

(1) Mr. Bruce's loan is non-interest bearing, secured by a pledge of the assets
    in an investment account, was advanced on March 11, 2002, is forgivable as
    to $250,000 on September 1, 2003 and as to $125,000 for subsequent
    anniversary dates and is due September 1, 2004.

                                        20
<PAGE>

                  STATEMENT OF CORPORATE GOVERNANCE PRACTICES

     The Board of Directors of the Corporation endorses the principle that its
corporate governance practices ("Corporate Governance Practices") are a
fundamental part of the proper functioning of the Corporation and believe that
they enhance the interests of its securityholders, employees, customers and
others having business and other dealings with the Corporation. These Practices
conform in all substantial aspects with applicable corporate governance
guidelines and standards. Since the beginning of the Corporation's last fiscal
year, there have been further significant regulatory changes affecting Corporate
Governance Practices of Canadian public corporations in Canada and the United
States. Some of these changes emanated from the enactment of the Sarbanes-Oxley
Act of 2002 in the United States which applies to foreign private issuers, such
as the Corporation. The New York Stock Exchange ("NYSE"), on which the
Corporation's shares are traded, adopted new corporate governance rules as part
of its listing standards, some of which apply to the Corporation, and
legislation passed in Ontario empowered the Ontario Securities Commission
("OSC") to make rules affecting certain Corporate Governance Practices of public
companies reporting under Canadian securities legislation. In particular, in
January of 2004, Canadian Securities Commissions adopted new regulations for the
composition and responsibilities of audit committees and for the certification
of disclosure in annual and interim financial statements, and also issued draft
new policies and guidelines for the disclosure of corporate governance practices
and guidelines for effective corporate governance. The Board closely follows
these and other corporate governance developments and is committed to enhancing
its Corporate Governance Practices in light of improving polices and practices.
The Corporation's Corporate Governance Practices, summarized below, are
responsive to the corporate governance guidelines currently adopted by The
Toronto Stock Exchange ("TSX Guidelines"). This statement of Corporate
Governance Practices was prepared by the Nominating and Corporate Governance
Committee of the Board and approved by the Board.

BOARD CHARTER AND MANDATE OF THE BOARD

     The Board has adopted a Board of Directors Charter (the "Board Charter") as
its written mandate providing guidance to Board members as to their duties and
responsibilities. The Board Charter confirms the Board's stewardship of the
business and affairs of the Corporation and its responsibility to supervise
management of the Corporation in conducting the Corporation's business. In
addition to containing specific roles and responsibilities that the Board is to
discharge, the Board Charter provides that Board members are to possess, among
other attributes, characteristics and traits that reflect high ethical standards
and integrity in their personal and professional dealings. Directors of the
Corporation are expected to conduct themselves according to the highest
standards of personal and professional integrity. It also outlines the
procedures to ensure effective and independent operation of the Board and the
role and principal responsibilities of the non-management Chair of the Board.
The Board Charter is maintained on the Corporation's website at www.rogers.com
and a copy of the Board Charter is annexed to this Information Circular as
Schedule A.

     The Board has explicitly assumed responsibility for the stewardship of the
Corporation, including matters referred to in the TSX Guidelines(1). The Board
discharges its responsibilities either directly or through its committees. The
Board has adopted a strategic planning process and reviews and approves, on at
least an annual basis, a strategic plan for each of the Corporation's operating
entities which takes into account, among other things, the opportunities and
risks of the business. The Board is responsible for identifying the principal
risks of the Corporation's businesses and overseeing the implementation of
appropriate risk assessment systems to manage these risks. In addition to
fulfilling its statutory and other requirements, the Board oversees and reviews,
and, where appropriate, formally approves:

     (a)   the strategic and operating plans and financial, capital and
           operating budgets of management;(2)

     (b)   the performance of management and the Corporation against the
           strategic plans and business, operating and capital budgets;

     (c)   the principal risks and the adequacy of systems and procedures to
           manage these risks;(3)

---------------

1   TSX Guideline No. 1.

2   TSX Guideline No. 1(a).

3   TSX Guideline No. 1(b).
                                        21
<PAGE>

     (d)   management development, management succession planning, including the
           appointment of senior management, and compensation and major benefit
           policies;(4)

     (e)   acquisitions and divestitures of business operations, strategic
           investments and alliances, major business development initiatives and
           unbudgeted expenditures in excess of $5 million;

     (f)   the Corporation's communications policies to shareholders and
           investors, which address the Corporation's interaction with analysts,
           investors and other key stakeholders and the public and contain
           measures for the Corporation to comply with its continuous and timely
           disclosure obligations;(5)

     (g)   the development of the Corporation's principles and approach to
           corporate governance, including approval of the Corporation's
           Corporate Governance Practices;(6)

     (h)   the monitoring of compliance with the Directors and Officers Code of
           Conduct and Ethics; and

     (i)   the integrity of the Corporation's accounting and financial reporting
           systems, disclosure controls and procedures, internal controls and
           management information systems.(7)

     There were 7 regularly scheduled Board meetings held during 2003. Eight
regular meetings of the Board are currently scheduled for calendar 2004. The
frequency of Board meetings as well as the nature of agenda items may change
depending on developments in the Corporation's affairs.

COMPOSITION OF THE BOARD AND MAJORITY OF INDEPENDENT DIRECTORS

     The Nominating and Corporate Governance Committee of the Board reviews the
size of the Board to ensure that the Board is able to operate effectively in
making Board decisions and to fulfil its various responsibilities. The Board is
currently composed of 15 members, with one vacancy. Two members of the Board are
executive officers of the Corporation and one member is an executive officer of
an affiliate of the Corporation. The Board has determined that 11 of the 15
directors are independent and unrelated on the basis that they do not have a
direct or indirect material relationship with the Corporation or its
subsidiaries which could, in the view of the Board, reasonably interfere with
the exercise of a director's independent judgment. The 4 related Board members
are Edward S. Rogers and Nadir Mohamed, both of whom are executive officers of
the Corporation, Edward Rogers, who is the son of Edward S. Rogers and an
executive officer of Rogers Cable Communications Inc., an affiliate of the
Corporation and Loretta A. Rogers, who is the spouse of Edward S. Rogers. The
Board is, accordingly, constituted with a majority of individuals who are
independent and unrelated directors.(8)

     On April 15, 2004, Albert Gnat, a director of the Corporation and its
predecessors since 1990, passed away. The Board believes it important to note
that Mr. Gnat made many and varied important contributions to the development of
the Corporation over many years both as a director and as a counsel to the
Corporation. The Board recognizes those contributions and expresses its deep
regret at his death.

                  Atque in perpetuum, amicus, ave atque vale,
                  (And forever, Friend, "Hail and farewell.")

     The 11 independent and unrelated directors of the Corporation are Messrs.
Chakrin, Emerson, Fierheller, Grant, Hull, Mathy, Morrissette, Peterson,
Roderick, Sievert and Wansbrough.

     In deciding whether a particular director is an independent and unrelated
director, the Board examined the factual circumstances of each director's direct
and indirect relationship to management and the Corporation and considered them
in the context of all relevant factors, including the fact that the Corporation
is controlled by RCI, which is controlled by an individual shareholder who is
also the Chairman of the Corporation. While certain of the directors of the
Corporation that the Board has affirmatively determined to be independent may be
directors, executive officers, partners or managing members in corporations or
firms that provide certain commercial, banking, legal or other services to the
Corporation, the Board has determined that the amount or dollar value of such
services is not material

---------------

4   TSX Guidelines No. 1(c) and No. 8.

5   TSX Guideline No. 1(d).

6   TSX Guidelines No. 5 and No. 10.

7   TSX Guideline No. 1(e).

8   TSX Guideline No. 2
                                        22
<PAGE>

and within the Director Material Relationship Standards referred to below and
that each such director is independent and unrelated.

     In considering the circumstances of the direct or indirect relationship of
each director to the Corporation and determining whether a direct or indirect
relationship that a director may have with the Corporation is material, as
referred to above, the Board took into account its Director Material
Relationship Standards ("Director Materiality Standards") that were adopted by
the Board to assist it in making such determinations. The Director Materiality
Standards provide that any business, commercial, industrial, banking,
consulting, professional, charitable or service relationship that may exist
between the Corporation (which for these purposes includes its subsidiaries) and
a director, or between the Corporation and an entity of which the director is a
director, executive officer, partner or managing member, shall be in the
ordinary course of business of the Corporation and on substantially the same
terms as those prevailing at the time for comparable transactions with
non-affiliated persons on an arm's length basis. Under the Director Materiality
Standards, the following relationships will be considered to be material in
respect of any director:

     (a)   The director has, within the preceding 3 fiscal years of the
           Corporation, been a provider of consulting, professional, investment
           banking, advisory or other services to the Corporation and the total
           direct compensation of the director from the Corporation in respect
           of those services in each such fiscal year amounted to more than
           U.S.$100,000 (other than payments arising from acting in his or her
           capacity as a director of the Corporation including as a part-time
           Chair or Vice-Chair of the Board or a committee of the Board).

     (b)   The director has, within the preceding 3 fiscal years of the
           Corporation, been a director, executive officer, partner or managing
           member of an entity that has or had a business, commercial,
           industrial, banking, consulting, professional or service relationship
           with the Corporation and, pursuant to that relationship, the
           aggregate annual sales or billings from that entity to the
           Corporation or from the Corporation to that entity, in each of the 3
           most recently completed fiscal years of that entity, amounted to more
           than the greater of 2 percent of that entity's consolidated gross
           revenues and U.S.$1,000,000.

     If a director has any other direct or indirect relationship with the
Corporation other than those set forth in (a) or (b) above, the Board will make
a determination whether that director is independent and unrelated based on a
consideration of all relevant facts and circumstances.

     A copy of the Director Materiality Standards is maintained on the
Corporation's website at www.rogers.com and a copy is annexed to this
Information Circular as Schedule B.

CONTROLLING SHAREHOLDER AND REPRESENTATION OF INTERESTS OF SHAREHOLDERS IN BOARD
COMPOSITION

     The Corporation is controlled by RCI, a public corporation which, directly
or indirectly, owns Class A Multiple Voting Shares and Class B Restricted Voting
Shares representing approximately 67.4% of the votes attached to all voting
shares of the Corporation and approximately 55.5% of the issued equity shares of
the Corporation. RCI has the right to exercise a majority of the votes for the
election of the 13 directors of the Corporation to be elected by the holders of
the Class A Multiple Voting Shares, voting separately as a class, and is the
"significant shareholder" of the Corporation.(9) Edward S. Rogers, O.C., the
President and Chief Executive Officer of RCI and a director and Chairman of the
Corporation is the controlling or "significant shareholder" of RCI. Mr. Rogers
indirectly beneficially owns and exercises control and direction over, directly
or indirectly, an aggregate of approximately 90.9% percent of the issued Class A
Shares of RCI, being the only class of voting shares of RCI, and approximately
29.7% of the total issued Class A Shares and Class B Non-Voting Shares of RCI.
Loretta A. Rogers, a related director of the Corporation, is the wife of Mr.
Rogers. Edward Rogers, a related director who is an executive officer of an
affiliate of the Corporation, is the son of Mr. and Mrs. Rogers.

     The Board believes that 7 of the 11 independent directors do not have any
direct or indirect material relationships with either the Corporation, RCI or
any of its subsidiaries, or Edward S. Rogers, including any private companies
directly or indirectly controlled by Edward S. Rogers.(10) The 4 unrelated
directors who have relationships with RCI or with Edward S. Rogers are H.
Garfield Emerson, Thomas I. Hull, The Honourable David R. Peterson and
Christopher C. Wansbrough, each of whom is an outside and unrelated director of
RCI. Messrs. Emerson, Hull and Wansbrough are

---------------

9   TSX Guideline No. 2.

10  TSX Guidelines No. 2 and No. 3.
                                        23
<PAGE>

     also independent directors of private companies that are controlled by
Edward S. Rogers and Mr. Wansbrough is also the part-time Chairman of Rogers
Telecommunications Limited, one of such private companies. As described above,
Pierre L. Morrissette is the controlling shareholder of Pelmorex Inc., which has
a commercial relationship with Rogers Cable Communications Inc., an affiliate of
the Corporation. The Board has determined that these relationships as
independent directors of such private companies is not a direct or indirect
material relationship with the Corporation which could reasonably interfere with
the exercise of those individuals' independent judgment.

     Three of the unrelated directors (Pierre L. Morrissette, George A.
Fierheller and Jim C. Grant) were elected by holders of the Class B Restricted
Voting Shares, voting separately as a class. An additional 4 of the unrelated
directors (Lewis M. Chakrin, Kent J. Mathy, Jordan M. Roderick and G. Michael
Sievert) all of whom are executive officers of AWS, were elected by holders of
the Class A Multiple Voting Shares, voting separately as a class, as nominees of
JVII General Partnership, pursuant to the terms of a shareholders agreement
entered into among RCI, JVII General Partnership and the Corporation. AWS is the
sole beneficial owner of JVII General Partnership, which owns Class A Multiple
Voting Shares and Class B Restricted Voting Shares representing approximately
31.1% of the votes attached to all voting shares of the Corporation and
approximately 34.1% of the total issued equity shares of the Corporation. See
"Shares Entitled to be Voted at the Meeting" and "Election of Directors" in this
Information Circular.

     The Board considers that the current nature of the composition of the Board
is appropriate in light of the structure and ownership of the Corporation's
share capital. The 7 independent directors of the Corporation who do not have a
relationship with the significant shareholder, as well as the other independent
directors of the Corporation, ensure that the interests of shareholders other
than the significant shareholder are brought to and considered by the Board. The
Board also believes that the composition of the full Board, which includes a
majority of outside and independent directors who are not part of the management
of the Corporation or its affiliates, including RCI, and the other Corporate
Governance Practices that the Board has adopted, also serve this purpose. Such
practices include the Board Charter, the Directors and Officers Code of Conduct
and Ethics and the mandates, functions and responsibilities of the Audit
Committee, the Nominating and Corporate Governance Committee and the
Compensation Committee and the other committees of the Board and their
respective mandates.(11)

     The Board does not consider it appropriate to change the size of the Board
at this time.(12) The Board believes that all the directors on the Board carry
out their duties objectively, in good faith and with a view to the best
interests of the Corporation and make a valuable contribution to the Board and
the Corporation for the benefit of all shareholders, including shareholders
other than the significant shareholder.

SEPARATION OF THE OFFICES OF CHIEF EXECUTIVE OFFICER AND DEPUTY CHAIR OF THE
BOARD

     Nadir H. Mohamed is the President and Chief Executive Officer of the
Corporation and serves as a director. Edward S. Rogers, the President and Chief
Executive Officer and the controlling and significant shareholder of RCI, is the
Chairman of the Corporation and serves as a director. Mr. Rogers is also
Chairman of the Finance Committee and a member of the Executive and Nominating
and Corporate Governance Committees of the Board.

     H. Garfield Emerson is the non-executive Deputy Chairman of the Board and
chairs meetings of the Board. The Deputy Chairman is an independent and
unrelated director of the Corporation and of RCI of which he is also the non-
executive Chairman of the Board. He is not a member of the Corporation's
management. This separation of the offices of the Deputy Chair of the Board and
the Chief Executive Officer of the Corporation reflects the policy of the Board
as set out in the Board Charter. As mandated in the Board Charter, the principal
responsibility of the Deputy Chair of the Board is to oversee, manage and assist
the Board in fulfilling its duties and responsibilities as a Board in an
effective manner independently of management. In overseeing the Board in the
fulfilment of its responsibilities, the duties of the Deputy Chair of the Board
include

     (a)   chairing Board meetings and annual and special meetings of the
           shareholders of the Corporation,

     (b)   organizing an appropriate annual work plan and regularly scheduled
           Board meetings,

---------------

11  TSX Guideline No. 3.

12  TSX Guideline No. 7.
                                        24
<PAGE>

     (c)   participating in the preparation of the agenda for each Board meeting
           and an appropriate information package that is sent on a timely basis
           to each director in advance of the meeting(13),

     (d)   monitoring the work of the Board committees and in that connection
           attending meetings of Board committees as a non-voting participant
           (other that those on which he otherwise sits),

     (e)   assisting in the Board's evaluation and self-assessment of its
           effectiveness and implementation of improvements,

     (f)   providing appropriate guidance to individual Board members in
           discharging their duties,

     (g)   ensuring newly appointed directors receive an appropriate orientation
           and education program, and

     (h)   providing arrangements for directors to communicate with the Deputy
           Chair formally and informally concerning matters of interest to Board
           members.

DIRECTORS AND OFFICERS CODE OF CONDUCT AND ETHICS

     The Board has adopted a Directors and Officers Code of Conduct and Ethics
("Code of Conduct and Ethics" or the "Code") to endorse and promote the
Corporation's commitment to honest and ethical conduct, including fair dealing
and ethical handling of conflicts of interest, to promote accurate and timely
disclosure and compliance with applicable laws and regulations and to ensure the
protection of the Corporation's business interests, assets and confidential
information.

     The Code of Conduct and Ethics, among other things, requires the
Corporation's directors and officers to act with integrity in an honest and
candid manner, to adhere to a high standard of business ethics and to disclose
any material transaction or relationship that could reasonably be expected to
give rise to a conflict of interest. Any conflicts of interest are reported on a
regular basis to the Audit Committee of the Board which has the responsibility
for monitoring compliance with the Code and applying and interpreting the Code
in particular situations. The Audit Committee is required to inform the Board if
it determines that a violation of the Code has occurred. Any waiver of a
provision of the Code of Conduct and Ethics for the directors and officers of
the Corporation may only be made by the Board or the Audit Committee and
reported to the Board.

     The Code of Conduct and Ethics has been publicly filed on SEDAR and is
available on the Corporation's website at www.rogers.com. A copy of the Code of
Conduct and Ethics is annexed to this Information Circular as Schedule C.

BOARD COMMITTEES

     The Board has six committees: the Audit Committee, the Compensation
Committee, the Executive Committee, the Finance Committee, the Nominating and
Corporate Governance Committee and the Technology Committee. In addition to
these committees, from time to time special purpose committees of the Board may
be appointed to deal with specific matters. Special committees of the Board
composed entirely of independent directors who are unrelated to the Corporation
and to the significant shareholder are appointed, if appropriate, to consider
and, if thought fit, approve, or recommend to the Board for approval,
transactions, including transactions not in the ordinary course of business of
the Corporation, between the Corporation and the significant shareholder or any
corporation directly or indirectly controlled by him, or between the Corporation
and subsidiaries of the Corporation.(14)

AUDIT COMMITTEE

     The Audit Committee is composed only of independent and unrelated
directors.(15) The Board adopted an Audit Committee Charter that is maintained
on the Corporation's website at www.rogers.com and a copy of such Charter is
annexed to this Information Circular as Schedule D. Under the terms of the Audit
Committee Charter, the members of the Audit Committee must be independent and
financially literate, or must become financially literate within a reasonable
period of time after appointment. The Corporation's management is responsible
for preparing the Corporation's financial statements and the external auditors
are responsible for auditing those financial statements. The Audit Committee is
responsible for overseeing the conduct of those activities by the Corporation's
management and the external auditors and overseeing the activities of the
internal auditors of the Corporation. The external auditors of the

---------------

13  TSX Guideline No. 12.

14  TSX Guidelines No. 9 and No. 13.

15  TSX Guideline No. 13.
                                        25
<PAGE>

     Corporations report and are accountable to the Audit Committee. The
Committee's responsibilities include, in summary, among other matters:

     (a)   in consultation with the external auditors and the internal auditors,
           reviewing the integrity of the Corporation's financial reporting
           processes and procedures, both internal and external, and any major
           issues as to the adequacy of the internal controls and any special
           audit steps adopted in light of any material control deficiencies;

     (b)   reviewing and discussing with management and the external auditors
           the Corporation's annual audited consolidated financial statements
           and its interim unaudited consolidated financial statements;

     (c)   receiving and reviewing an annual report from the external auditors
           describing all critical accounting policies and practices used by the
           Corporation, all material alternative accounting treatments of
           financial information within GAAP discussed with management and other
           material written communications between the external auditors and
           management;

     (d)   reviewing the interim quarterly and annual financial information and
           annual and interim press releases prior to the release of earnings
           information;

     (e)   responsibility for the selection, nomination, compensation,
           retention, termination and oversight of the work of the external
           auditor engaged for audit, review and attest services and for
           recommending to the Board the external auditors to be nominated for
           approval by the shareholders;

     (f)   pre-approval of all audit engagements and the provision by the
           external auditors of all non-audit services, including fees and terms
           for all audit engagements and non-audit services, including authority
           to establish the types of non-audit services the external auditors
           shall not be permitted to provide and the types of audit,
           audit-related and non-audit services for which the Audit Committee
           may retain the external auditors;

     (g)   assessing and reporting to the Board on the independence and
           performance of the external auditors;

     (h)   overseeing management's design and implementation of and reporting on
           internal controls, including receiving reports from management, the
           internal auditors and the external auditors with regard to the
           reliability and effective operation of the Corporation's accounting
           system and internal controls;

     (i)   reviewing the activities, organization and qualifications of the
           internal auditors, including the responsibilities, budget and
           staffing of the internal audit function;

     (j)   reviewing, prior to finalization, periodic public disclosure
           documents containing financial information, including Management's
           Discussion and Analysis (MD&A) and Annual Information Form (AIF);

     (k)   reviewing with the Corporation's General Counsel legal compliance
           matters, significant litigation and other legal matters;

     (l)   establishing procedures and policies for the receipt, retention and
           treatment of complaints received by the Corporation regarding
           accounting, internal accounting controls or auditing matters and the
           confidential, anonymous submission by employees of the Corporation of
           concerns regarding questionable accounting or auditing matters;

     (m)  preparing and reviewing with the Board an annual performance
          evaluation of the Audit Committee;

     (n)   reviewing and assessing the adequacy of the Audit Committee Charter
           on an annual basis.

     The Audit Committee meets periodically and separately with the Chief
Financial Officer, the internal auditor, the external auditors and the General
Counsel of the Corporation in private sessions. The external auditors report
directly to the Audit Committee. The Audit Committee has the authority to engage
and establish, at the expense of the Corporation, outside advisors including
experts in particular areas of accounting, legal counsel and other experts of
consultants as it determines necessary to carry out its duties, without seeking
approval of the Board or management. The Audit Committee has the authority to
conduct any investigation appropriate to fulfilling its responsibilities and has
direct access to the external auditors, internal auditors, the general counsel
and other officers and employees of the Corporation.

     The Audit Committee met 6 times in 2003. Its members in 2003 were Messrs.
Chakrin, Emerson, Fierheller, Finnegan, Grant, Morrissette, Peterson, Ricketts
and Wansbrough. Mr. Morrissette is the Chairman of the Audit

                                        26
<PAGE>

Committee. Mr. Ricketts resigned from the Audit Committee in May, 2003. Messrs.
Chakrin and Finnegan resigned from the Audit Committee in July, 2003. Mr.
Wansbrough was appointed to the Audit Committee in May, 2003.

COMPENSATION COMMITTEE

     The Compensation Committee is composed of five outside non-management
directors, all of whom but two are independent and unrelated directors.(16) The
Compensation Committee approves, amongst other matters, the compensation of
senior executives and other employees above specified remuneration levels and
reviews and recommends to the Board for approval the Corporation's executive
compensation policies. The Compensation Committee also reviews the design and
competitiveness of the Corporation's compensation and benefit programmes
generally and the Corporation's management development and succession planning
for its senior executives.

     The Compensation Committee met 4 times in 2003. Mr. Fierheller is the
Chairman of the Compensation Committee. Its members in 2003 were Messrs.
Emerson, Fierheller, Gnat, Hull, Roberts and Roderick. Mr. Roberts resigned in
May, 2003.

EXECUTIVE COMMITTEE

     The Executive Committee is composed of a majority of independent and
related directors, and includes a member of management, Edward S. Rogers, and an
executive officer of an affiliate of the Corporation, Edward Rogers.(17) The
Executive Committee has delegated to it all of the powers that may be delegated
to an Executive Committee under the Corporation's governing statute, being
Canada Business Corporations Act.

     The Executive Committee did not meet in 2003. Mr. Edward S. Rogers is the
Chairman of the Executive Committee. Its members in 2003 were Messrs. Chakrin,
Emerson, Hull, Mohamed, Roderick, Edward S. Rogers, Edward Rogers and
Wansbrough. Mr. Wansbrough was appointed in May, 2003.

NOMINATING AND CORPORATE GOVERNANCE COMMITTEE

     The Nominating and Corporate Governance Committee is composed of a majority
of related directors and includes one member of management, Edward S. Rogers,
the controlling shareholder of RCI and the Chairman of the Corporation.(18) It
is responsible for developing the Corporation's approach to corporate governance
issues. The Nominating and Corporate Committee makes recommendations to the
Board with respect to developments in the areas of corporate governance and the
Corporate Governance Practices of the Board, including the methods and processes
by which the Board fulfils its duties. Such corporate governance issues include:

     (a)   developing, recommending to the Board and reviewing from time to time
           the Corporate Governance Practices of the Corporation, including the
           Board Charter and the Code of Conduct and Ethics;(19)

     (b)   recommending the number and content of meetings and the annual work
           plan and schedule of issues for the consideration of the Board and
           its committees;

     (c)   reviewing the size and composition of the Board and its committees
           and the board of directors and the committees of the Corporation's
           affiliates;(20)

     (d)   establishing selection criteria for members of the Board and
           identifying prospective new members of the Board;(21)

     (e)   reporting to the Board with respect to the adequacy and form of the
           compensation of directors;(22)

     (f)   recommending appropriate candidates for nomination for election to
           the Board and to the boards of directors of the Corporation's
           affiliates;(23)

---------------

16  TSX Guidelines No. 9 and No. 11.

17  TSX Guideline No. 9.

18  TSX Guidelines No. 4 and No. 9.

19  TSX Guideline No. 10.

20  TSX Guideline No. 7.

21  TSX Guideline No. 4.

22  TSX Guideline No. 8.

23  TSX Guideline No. 4.
                                        27
<PAGE>

     (g)   providing an orientation program for new directors;(24)

     (h)   evaluating, on an annual basis, the performance of the Board as a
           whole, its committees and the contribution of each individual
           director;(25)

     (i)   reviewing the mandates of the committees of the Board; and

     (j)   monitoring the policies of the Corporation regarding senior officers
           accepting directorships with non-affiliated corporations, minimum
           common share ownership for non-management directors, insider trading
           and disclosure and restricted use of confidential material
           information.

     The Nominating and Corporate Governance Committee also oversees a system
that enables an individual director to engage an outside advisor at the expense
of the Corporation in appropriate circumstances.(26)

     The Nominating and Corporate Governance Committee held two meetings in
2003. Its members were Messrs. Emerson, Fierheller, Finnegan, Hull, Mathy,
Ricketts, Sievert and Edward S. Rogers. Mr. Emerson is the Chairman of the
Nominating and Corporate Governance Committee. Mr. Ricketts resigned and Mr.
Fierheller was appointed in May, 2003. Mr. Finnegan resigned and Mr. Mathy was
appointed in October, 2003.

TECHNOLOGY COMMITTEE

     The Board has approved the Corporation's participation in the membership of
the intercompany Technology Committee composed of directors from each of the
Corporation, RCI, Rogers Cable Communications Inc. and Rogers Media Inc.

     The major responsibilities of the Technology Committee include reviewing
and reporting to the Board and the boards of the other corporate participants on
the major issues and processes regarding

     (a)   the acquisition of technology assets, including equipment and
           software applications (both engineering and information technology);

     (b)   evolving developments in technology affecting the Corporation's
           businesses;

     (c)   developing management presentations to the Board on technology
           issues;

     (d)   assisting the Board in the evaluation of the efficacy and
           implications of technology issues of major proposed strategic
           alliances and investments, licensing agreements and joint ventures;
           and

     (e)   reviewing corporate strategy on technology issues.

     To assist the Technology Committee in performing its mandate, the Committee
may consult with and engage outside experts and professional advisors.

     The Technology Committee held 3 meetings and tutorial sessions for all
directors of the Corporation and its operating subsidiaries in 2003 at which
presentations were made on various technology issues affecting the Corporation.

     Members of the Technology Committee in 2003 from the Board were Messrs.
Chakrin, Emerson, Grant, Roderick, Edward S. Rogers and Edward Rogers. The other
members of the Technology Committee were Robert Korthals and William Schleyer
(representing RCI), James Fleck (representing Rogers Media Inc.) and John
MacDonald (representing Rogers Cable Inc.). The Chairman of the Technology
Committee is James Grant, an unrelated director of the Corporation.

FINANCE COMMITTEE

     The Finance Committee is composed of an equal number of related and
unrelated directors of the Corporation.(27) The members of the Finance Committee
in 2003 were Messrs. Chakrin, Emerson, Hull, Roderick, Edward S. Rogers, Edward
Rogers and Wansbrough. Edward S. Rogers, the controlling shareholder and the
President and Chief Executive Officer of RCI, is the Chairman of the Finance
Committee. The Finance Committee did not meet in 2003.

---------------

24  TSX Guideline No. 6.

25  TSX Guideline No. 5.

26  TSX Guideline No. 14.

27  TSX Guideline No. 9.
                                        28
<PAGE>

     Without derogating from the rights and duties of the Board, it is the
responsibility of the Finance Committee to review and report to the Board or any
other committee of the Board on certain matters prior to their submission to the
Board or to any other committee of the Board or the filing of any document
required to implement any such matter with any governmental or regulatory
authority, including:

     (a)   financings, including the issue of shares;

     (b)   non-budgeted transactions outside the ordinary course of business
           involving more than $30 million;

     (c)   alliance, branding, license, partnership and joint venture
           arrangements involving more than $30 million; and

     (d)   the grant or assumption of any right of first negotiation, first
           offer or first refusal or the grant or assumption or issuance of any
           non-competition covenant or exclusivity undertaking, in each case
           which involves property, assets or revenues in excess of $30 million
           in the aggregate.

     The Finance Committee is also responsible to review candidates for
appointment as the Chief Financial Officer and Chair of the Audit Committee of
the Corporation and its subsidiaries.

DECISIONS REQUIRING BOARD APPROVAL

     In addition to those matters that are reviewed by the Board which must be
approved by the Board under its Corporate Governance Practices and by law,
management is also required to seek Board approval for any unbudgeted
expenditure in excess of $5 million that has not been previously approved by the
Board as part of the Corporation's operating plans and capital and operating
budgets. Management is also required to obtain Board approval before entering
into any major strategic initiative or any venture which is outside the
Corporation's existing businesses.(28) These matters are included in "Role and
Responsibilities of the Board" in the Board Charter.

BOARD AND DIRECTOR PERFORMANCE

     As noted earlier, the Nominating and Corporate Governance Committee has the
mandate to recommend to the Board nominees for election as Board directors and
for evaluating the performance of the Board as a whole, its committees and the
contributions of each director. In fulfilling this responsibility, the Committee
periodically uses written questionnaires to solicit comment and evaluation from
directors individually on the Board's performance and effectiveness and to seek
recommendations for areas of improvement of Board practices and processes. The
Deputy Chairman of the Board also engages in discussions with the members of the
Board individually to review Board and director areas of interest, including
assessments of the effectiveness and performance of the Board. The Deputy
Chairman also discusses directly with each chairperson of the committees of the
Board the mandate and functioning of the committees and reviews the
recommendations from committee chairpersons with the Nominating and Corporate
Governance Committee concerning the operation of the Board committees, including
assessments of their respective effectiveness and performance.

INVESTOR FEEDBACK

     RCI maintains an Investor Relations department which provides investor
relations services to the Corporation that the Board believes are important and
highly effective. Every investor inquiry receives a prompt response from the
Investor Relations department or an appropriate officer of the Corporation.

BOARD'S EXPECTATIONS OF MANAGEMENT

     The quality and completeness of information which management provides to
the Board is critical to the proper functioning of the Board. Directors must
have confidence in the data gathering, analysis and reporting functions of
management. The Deputy Chairman of the Board and the Nominating and Corporate
Governance Committee of the Board monitor the nature and timeliness of the
information requested of and provided by management to the Board so that the
Board is able to determine if the Board can be more effective in identifying
problems and opportunities for the Corporation.

     The Chief Executive Officer has provided a detailed job description for the
office of the Chief Executive which specifically outlines his responsibilities.
This job description has been approved by the Compensation Committee. The

---------------

28  TSX Guideline No. 11.
                                        29
<PAGE>

Chief Executive Officer's written objectives for the current year will be
reviewed and approved by the Compensation Committee.(29)

                 INTEREST OF INSIDERS IN MATERIAL TRANSACTIONS

     During the fiscal year ended December 31, 2003, other than as disclosed in
this Information Circular, in the consolidated financial statements of the
Corporation for the fiscal year ended December 31, 2003 and the notes thereto
and Management's Discussion and Analysis of the Corporation's financial
condition and results of operation for the year ended December 31, 2003, the
Corporation is not aware of any material interest of any insider of the
Corporation, or any proposed nominee for election as a director of the
Corporation, or any associate or affiliate of such insider or proposed nominee,
in any transaction or in any proposed transaction which has materially affected
or would materially affect the Corporation or any of its subsidiaries.

                              MANAGEMENT CONTRACTS

     Other than as disclosed in this Information Circular, in the consolidated
financial statements of the Corporation for the fiscal year ended December 31,
2003 and the notes thereto and Management's Discussion and Analysis of the
Corporation's financial condition and results of operation for the year ended
December 31, 2003, there are no agreements or arrangements where management
functions of the Corporation or any subsidiary were, to any substantial degree,
performed by a person or company other than the directors or senior officers of
the Corporation or subsidiary.

              SHAREHOLDER PROPOSALS FOR NEXT YEAR'S ANNUAL MEETING

     The Canada Business Corporations Act permits certain eligible shareholders
of the Corporation to submit shareholder proposals to the Corporation, which
proposals may be included in next year's management proxy circular relating to
an annual meeting of shareholders. The Corporation may omit a shareholder
proposal from next year's management proxy circular under applicable law if the
proposal is not received by the Corporation by January 19, 2005.

                                    GENERAL

     Copies of the Corporation's current Annual Information Form (together with
one copy of any document, or the pertinent pages of any document, incorporated
therein by reference), the comparative financial statements of the Corporation
for the year ended December 31, 2003 together with the report of the auditors
thereon, Management's Discussion and Analysis of the Corporation's financial
condition and results of operation for the year ended December 31, 2003, any
interim financial statements of the Corporation that have been filed for any
period after the end of the Corporation's most recently completed financial year
and this Information Circular are available to anyone, upon request, from Mr.
Bruce Mann, Vice President, Investor Relations, Rogers Communications Inc., 333
Bloor Street East, Toronto, Ontario, M4W 1G9 (Telephone: (416) 935-3532) and
without charge to security holders of the Corporation.

     Information contained herein is given as of April 19, 2004, unless
otherwise noted. The contents and the sending of this Information Circular have
been approved by the board of directors of the Corporation.

     DATED this 19th day of April, 2004.

                                         BY ORDER OF THE BOARD OF DIRECTORS

                                         DAVID P. MILLER, Secretary

---------------

29  TSX Guideline No. 11.
                                        30
<PAGE>

                                   SCHEDULE A

                           BOARD OF DIRECTORS CHARTER

     The purpose of this charter ("Charter") of the board of directors (the
"Board") of Rogers Wireless Communications Inc. (the "Company") is to provide
guidance to Board members as to their duties and responsibilities. The power and
authority of the Board is subject to the provisions of applicable law.

PURPOSE OF THE BOARD

     The Board is responsible for the stewardship of the Company. This requires
the Board to oversee the conduct of the business and affairs of the Company. The
Board discharges some of its responsibilities directly and discharges others
through committees of the Board. The Board is not responsible for the day-to-day
management and operation of the Company's business, as this responsibility has
been delegated to management. The Board is, however, responsible for supervising
management in carrying out this responsibility.

MEMBERSHIP

     The Board consists of directors elected by the shareholders as provided for
in the Company's constating documents and in accordance with applicable law.
From time to time, the Nominating and Corporate Governance Committee shall
review the size of the Board to ensure that its size facilitates effective
decision-making by the Board in the fulfilment of its responsibilities.

     Each member of the Board must act honestly and in good faith with a view to
the best interests of the Company, and must exercise the care, diligence and
skill that a reasonably prudent person would exercise in comparable
circumstances. A director is responsible for the matters under "Role and
Responsibilities of the Board" below as well as for other duties as they arise
in the director's role.

     All members of the Board shall have suitable experience and skills given
the nature of the Company and its businesses and have a proven record of sound
judgment. Directors are to possess characteristic and traits that reflect:

     -  high ethical standards and integrity in their personal and professional
        dealings and be willing to be accountable for their decisions as
        directors;

     -  the ability to provide thoughtful and experienced counsel on a broad
        range of issues and to develop a depth of knowledge of the businesses of
        the Company in order to understand and assess the assumptions on which
        the Company's strategic and business plans are based and to form an
        independent judgment with respect to the appropriateness and probability
        of achieving such plans;

     -  the ability to monitor and evaluate the financial performance of the
        Company;

     -  an appreciation of the value of Board and team performance over
        individual performance and a respect for others;

     -  an openness for the opinions of others and the willingness to listen, as
        well as the ability to communicate effectively and to raise tough
        questions in a manner that encourages open and frank discussion.

     Directors are expected to commit the time and resources necessary to
properly carry out their duties. Among other matters, directors are expected to
adequately prepare for and attend all regularly scheduled Board meetings. New
directors are expected to understand fully the role of the Board, the role of
the committees of the Board and the contribution individual directors are
expected to make.

ETHICS

     Members of the Board shall carry out their responsibilities objectively,
honestly and in good faith with a view to the best interests of the Company.
Directors of the Company are expected to conduct themselves according to the
highest standards of personal and professional integrity. Directors are also
expected to set the standard for Company-wide ethical conduct and ensure ethical
behaviour and compliance with laws and regulations. If an actual or potential
conflict of interest arises, a director shall promptly inform the Chair and
shall refrain from voting or participating in discussion of the matter in
respect of which they have an actual or potential conflict of interest. If it is
determined that a significant conflict of interest exists and cannot be
resolved, the director should resign.

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     Directors are expected to act in accordance with applicable law, the
Company's By-laws and the Company's Directors and Officers Code of Conduct and
Ethics. The Board is required to monitor compliance with the Directors and
Officers Code of Conduct and Ethics and is responsible for the granting of any
waivers from compliance with the Code for directors and officers.

MEETINGS

     The Board shall meet in accordance with a schedule established each year by
the Board, and at such other times as the Board may determine. Meeting agendas
shall be developed in consultation with the Chair. Board members may propose
agenda items though communication with the Chair. The Chair is responsible for
ensuring that a suitably comprehensive information package is sent to each
director in advance of each meeting. At the discretion of the Board, members of
management and others may attend Board meetings, except for separate meetings of
the non-management directors of the Board.

     Directors are expected to be fully prepared for each Board meeting, which
requires them, at a minimum, to have read the material provided to them prior to
the meeting. At Board meetings, each director is expected to take an active role
in discussion and decision-making. To facilitate this, the Chair is responsible
for fostering an atmosphere conducive to open discussion and debate.

     Non-management members of the Board shall have the opportunity to meet at
appropriate times without management present at regularly scheduled meetings.
The Chair shall be responsible for presiding over meetings of the non-management
directors. Non-management Board members may propose agenda items for meetings of
non-management Board members through communication with the Chair.

ROLE AND RESPONSIBILITIES OF THE BOARD

     The Board is responsible for approving the Company's goals, objectives and
strategies. The Board shall adopt a strategic planning process and approve and
review, on at least an annual basis, a strategic plan which takes into account,
among other things, the opportunities and risks of the business. The Board is
also responsible for identifying the principal risks of the Company's businesses
and overseeing the implementation of appropriate risk assessment systems to
manage these risks.

     In addition to the other matters provided in this Charter, the Board is
also responsible for the following specific matters:

     -  review and approve management's strategic plans;

     -  review and approve the Company's financial objectives, business plans
        and budgets, including capital allocations and expenditures;

     -  monitor corporate performance against the strategic plans and business,
        operating and capital budgets;

     -  management succession planning, including appointing, training and
        monitoring senior management and, in particular, the Chief Executive
        Officer of the Company;

     -  providing that an appropriate portion of senior executive management's
        compensation is tied to both short-term and longer-term performance of
        the Company;

     -  monitor the integrity of the Company's accounting and financial
        reporting systems, disclosure controls and procedures, internal controls
        and management information systems;

     -  approve acquisitions and divestitures of business operations, strategic
        investments and alliances, major business development initiatives and
        any unbudgeted expenditure in excess of $5 million;

     -  the Company's communication policies, which:

       (a)   address how the Company interacts with analysts, investors, other
             key stakeholders and the public;

       (b)   contain measures for the Company to comply with its continuous and
             timely disclosure obligations and to avoid selective disclosure and
             insider trading;

     -  developing the Company's principles and approach to corporate
        governance;

     -  assess its own effectiveness in fulfilling its responsibilities,
        including monitoring the effectiveness of individual directors;

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<PAGE>

     -  monitoring compliance with the Directors and Officers Code of Conduct
        and Ethics.

     A director has an important and positive role as a representative of the
Company. A director is also expected to participate in outside activities that
enhance the Company's image to investors, employees, customers and the public.

ROLE AND RESPONSIBILITIES OF THE CHAIR

     It is the policy of the Board that there be a separation of the offices of
the Chair and the Chief Executive Officer and that the Chair not be a member of
management of the Company. The Chair and the Chief Executive Officer are to be
in regular communications during the course of the year including with respect
to the Company's business and the responsibilities of the Board.

     The principal responsibilities of the Chair of the Board shall be to
oversee, manage and assist the Board in fulfilling its duties and
responsibilities as a Board in an effective manner independently of management.
The Chair shall be responsible, among other things,

     -  to chair Board meetings and annual and special meetings of shareholders,

     -  to organize an appropriate annual work plan and regularly scheduled
        meetings for the Board,

     -  to participate in the preparation of the agenda for each Board meeting,

     -  to monitor the work of the committees of the Board and in that
        connection the Chair may attend, as a non-voting participant, all
        meetings of Board committees (other than those on which he otherwise
        sits),

     -  to arrange for an appropriate information package to be provided on a
        timely basis to each director in advance of the meeting,

     -  to assist in the Board's evaluation and self-assessment of its
        effectiveness and implementation of improvements,

     -  to provide appropriate guidance to individual Board members in
        discharging their duties,

     -  to ensure newly appointed directors receive an appropriate orientation
        and education program, and

     -  to provide arrangements for members of the Board to communicate with the
        Chair formally and informally concerning matters of interest to Board
        members.

PROCEDURES TO ENSURE EFFECTIVE AND INDEPENDENT OPERATION

     The Board recognizes the importance of having procedures in place to ensure
the effective and independent operation of the Board. In addition to the
policies and procedures provided elsewhere in this Charter including under "Role
and Responsibilities of the Chair" set out above, the Board has adopted the
following procedures:

     -  the Board has complete access to the Company's management;

     -  the Board requires timely and accurate reporting from management and
        shall regularly review the quality of management's reports;

     -  subject to the approval of the Nominating and Corporate Governance
        Committee, individual directors may engage an external adviser at the
        expense of the Company in appropriate circumstances;

     -  the Board shall maintain an Investor Relations department and every
        investor inquiry shall receive a prompt response from the Investor
        Relations department or an appropriate officer of the Company;

     -  the Chair of the Board shall monitor the nature and timeliness of the
        information requested by and provided by management to the Board to
        determine if the Board can be more effective in identifying problems and
        opportunities for the Company; and

     -  the Board, together with the Chief Executive Officer, shall develop a
        detailed job description for the Chief Executive Officer. This
        description shall be approved by the Management Compensation Committee.
        The Board shall assess the Chief Executive Officer against the
        objectives set out in this job description.

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<PAGE>

BOARD COMMITTEES

     Subject to limits on delegation contained in corporate law applicable to
the Company, the Board has the authority to establish and carry out its duties
through committees and to appoint directors to be members of these committees.
The Board assesses the matters to be delegated to committees of the Board and
the constitution of such committees annually or more frequently, as
circumstances require. From time to time the Board may create ad hoc committees
to examine specific issues on behalf of the Board.

                                        34
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                                   SCHEDULE B

                    DIRECTOR MATERIAL RELATIONSHIP STANDARDS

1.   INTRODUCTION

     The Board of Directors (the "Board") of Rogers Wireless Communications Inc.
(the "Company") has adopted these Director Material Relationship Standards for
the purpose of assisting the Board in making determinations whether or not a
direct or indirect business, commercial, banking, consulting, professional or
charitable relationship that a director may have with the Company (which for the
purposes of these Standards includes its subsidiaries) is a material
relationship that could, in the view of the Board, reasonably interfere with the
exercise of the director's independent judgment.

2.   STANDARD OF DIRECTOR RELATIONSHIPS

     Any business, commercial, industrial, banking, consulting, professional,
charitable or service relationship that may exist between the Company and a
director of the Company, or between the Company and an entity of which the
director is a director, executive officer, partner or managing member, shall be
in the ordinary course of business of the Company and on substantially the same
terms as those prevailing at the time for comparable transactions with non-
affiliated persons on an arm's length basis.

3.   MATERIALITY STANDARDS

     The following relationships will be considered to be material in respect of
any director:

     (a)   The director has, within the preceding 3 fiscal years of the Company,
           been a provider of consulting, professional, investment banking,
           advisory or other services to the Company and the total direct
           compensation of the director from the Company in respect of those
           services in each such fiscal year amounted to more than U.S.$100,000
           (other than payments arising from acting in his or her capacity as a
           director of the Company including as a part-time Chair or Vice Chair
           of the Board or a committee of the Board).

     (b)   The director has, within the preceding 3 fiscal years of the Company,
           been a director, executive officer, partner or managing member of an
           entity that has or had a business, commercial, industrial, banking,
           consulting, professional or service relationship with the Company
           and, pursuant to that relationship, the aggregate annual sales or
           billings from that entity to the Company, or from the Company to that
           entity, in each of the 3 most recently completed fiscal years of that
           entity, amounted to more than the greater of 2 percent of that
           entity's consolidated gross revenues and U.S.$1,000,000.

4.   OTHER DIRECTOR RELATIONSHIPS

     If a director has any other direct or indirect relationship with the
Company other than those set forth in 3.(a) or (b) above, the Board will make a
determination whether that director has a material relationship with the Company
based on a consideration of all relevant facts and circumstances.

5.   INTERPRETATION

     For the purposes of these Standards, the terms used herein shall have the
following meanings:

     (a)   "entity" -- includes a body corporate, a partnership, a trust, a
           joint venture or an unincorporated association or organization;

     (b)   "subsidiary" -- a body corporate is a subsidiary of another body
           corporate if (a) it is controlled by (i) that other body corporate,
           (ii) that other body corporate and one or more bodies corporate each
           of which is controlled by that body corporate, or (iii) two or more
           bodies corporate each of which is controlled by that other body
           corporate, or (b) it is a subsidiary of a body corporate that is a
           subsidiary of that other body corporate.

                                        35
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                                   SCHEDULE C

               DIRECTORS AND OFFICERS CODE OF CONDUCT AND ETHICS

     The Board of Directors (the "Board") of Rogers Wireless Communications Inc.
(the "Company", which for the purpose of this Code includes its subsidiaries)
has adopted this code of conduct and ethics for directors and officers of the
Company (the "Code") to:

     -  endorse and promote the Company's commitment to honest and ethical
        conduct, including fair dealing and ethical handling of conflicts of
        interest;

     -  promote full, fair, accurate, timely and understandable disclosure;

     -  promote compliance with applicable laws and governmental rules and
        regulations;

     -  ensure the protection of the Company's legitimate business interests,
        including corporate opportunities, assets and confidential information;
        and

     -  deter wrongdoing.

     All directors and officers of the Company are expected to be familiar with
the Code and to adhere to those principles and procedures set forth in the Code
that apply to them. The Company's more detailed policies and procedures that
apply to all employees of the Company set forth in the Company's Business
Conduct Guidelines are separate requirements and are not part of this Code.

     For purposes of this Code, the "Code of Ethics Contact Person" will be, for
the members of the Board, the Chair of the Board or the Chair of the Audit
Committee of the Board, and for the officers of the Company, the General Counsel
of the Company or the Chair of the Board.

HONEST AND CANDID CONDUCT

     Each director and officer owes a duty to the Company to act with integrity.
Integrity requires, among other things, being honest and candid. Deceit and
subordination of principle are inconsistent with integrity.

     Each director and officer must:

     -  act with integrity, including being honest and candid while still
        maintaining the confidentiality of information where required or
        consistent with the Company's policies.

     -  observe both the form and spirit of applicable laws and governmental
        rules and regulations, accounting standards and Company policies.

     -  adhere to a high standard of business ethics.

CONFLICTS OF INTEREST

     A "conflict of interest" occurs when an individual's private or personal
interest interferes, or may appear to interfere, with the interests of the
Company. A conflict of interest can arise when a director or officer takes
actions or has interests that may make it difficult to perform his or her
Company work objectively and effectively. For example, a conflict of interest
would arise if a director or officer, or member or his or her family, receives
improper personal benefits as a result of his or her position in the Company.
Any material transaction or relationship that could reasonably be expected to
give rise to a conflict of interest should be discussed with the Code of Ethics
Contact Person.

     In considering a conflict of interest between a director and the Company,
consideration shall be given to the Director Material Relationship Standards
approved by the Board.

     Officers of the Company are also to comply with the Company's Policy
Regarding Senior Officers Accepting Directorships with Non-Affiliated
Corporations.

     Conflict of interest situations involving directors and officers may
include the following:

     -  any material ownership or financial interest in any supplier of goods or
        services to the Company or in any major customer of the Company;

     -  any consulting or employment relationship with any major customer of the
        Company, supplier or competitor;

     -  any outside business activity that detracts from an individual's ability
        to devote appropriate time and attention to his or her responsibilities
        with the Company;
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<PAGE>

     -  the receipt of non-nominal gifts or excessive entertainment from any
        company with which the Company has current or prospective business
        dealings;

     -  being in the position of supervising, reviewing or having any influence
        on the job evaluation, pay or benefit of any immediate family member.

     Anything that would present a conflict of interest for a director or
officer would likely also present a conflict if it is related to a member of his
or her immediate family.

     Conflicts of interest between a director or officer and the Company are to
be disclosed to the Board, the Chief Executive Officer or a Code of Ethics
Contact Person and reported to the Audit Committee of the Board on a regular
basis.

DISCLOSURE

     Each director or officer involved in the Company's disclosure process,
including the Chief Executive Officer and the Chief Financial Officer, is
required to be familiar with and comply with the Company's disclosure controls
and procedures and internal control over financial reporting, to the extent
relevant to his or her area of responsibility, so that the Company's public
reports filed with securities commissions and regulatory authorities comply in
all material respects with the applicable securities laws and rules. In
addition, each such person having direct or supervisory authority regarding
these regulatory filings or the Company's other public communications concerning
its general business, results, financial condition and prospects should, to the
extent appropriate within his or her area of responsibility, consult with other
Company officers and employees and take other appropriate steps regarding these
disclosures with the goal of making full, fair, accurate, timely and
understandable disclosure.

     Each director or officer who is involved in the Company's disclosure
process, including the Chief Executive Officer and the Chief Financial Officer,
must:

     -  familiarize himself or herself with the disclosure requirements
        applicable to the Company as well as the business and financial
        operations of the Company.

     -  not knowingly misrepresent, or cause others to misrepresent, facts about
        the Company to others, whether within or outside the Company, including
        to the Company's independent auditors, governmental regulators and
        self-regulatory organizations.

     -  properly review and critically analyse proposed disclosure for accuracy
        and completeness (or, where appropriate, delegate this task to others).

COMPLIANCE

     It is the Company's policy to comply with all applicable laws, rules and
regulations. It is the personal responsibility of each officer and director to
adhere to the standards and restrictions imposed by those laws, rules and
regulations.

     It is against Company policy and in many circumstances illegal for a
director or officer to profit from undisclosed information relating to the
Company or any other company. Any director, or officer may not purchase or sell
any of the Company's securities while in possession of material non-public
information relating to the Company. Also, any director or officer may not
purchase or sell securities of any other company while in possession of any
material non-public information relating to that company.

     Any director or officer who is uncertain about the legal rules involving a
purchase or sale of, or other dealings in, any Company securities or any
securities in companies that he or she is familiar with by virtue of his or her
work for the Company, should consult with the General Counsel of the Company
before making any such transaction.

     Directors and officers are also to comply with the Company's policies
relating to insider trading and blackout periods for insider trading.

REPORTING, ACCOUNTABILITY AND WAIVERS

     The Audit Committee is responsible for monitoring compliance with the Code,
applying this Code to specific situations in which questions are presented to it
and has the authority to interpret this Code in any particular situation. Any
director or officer who becomes aware of any existing or potential violation of
this Code is required to notify the Code of Ethics Contact Person promptly.
Failure to do so is itself a violation of this Code.

                                        37
<PAGE>

     Any questions relating to how this Code should be interpreted or applied
should be addressed to the Code of Ethics Contact Person. A director or officer
who is unsure of whether a situation violates this Code should discuss the
situation with the Code of Ethics Contact Person to prevent possible
misunderstandings and embarrassment at a later date.

     The Company will follow the following procedures in investigating and
enforcing this Code, and in reporting on the Code:

     -  Violations and potential violations will be reported by the Code of
        Ethics Contact Person to the Audit Committee, after appropriate
        investigation.

     -  The Audit Committee will take all appropriate action to investigate any
        alleged violations reported to them after appropriate investigation.

     -  If the Audit Committee determines that a violation has occurred, the
        Audit Committee will inform the Board.

     -  Upon being notified that a violation has occurred, the Board will take
        such disciplinary or preventive action as it deems appropriate, up to
        and including dismissal or, in the event of criminal or other serious
        violations of law, notification of appropriate governmental authorities.

     The Company may waive specific provisions of this Code in a particular
situation. Any waiver of the Code for directors or officers of the Company may
be made only by the Board or by the Audit Committee of the Board and reported to
the Board. Any waiver by the Company of a provision of the Code to a director or
officer that relates to a material item shall be disclosed by the Company in
accordance with applicable legal and regulatory requirements.

CORPORATE OPPORTUNITIES

     Directors and officers owe a duty to the Company to advance the Company's
business interests when the opportunity to do so arises. Directors and officers
are prohibited from taking (or directing to a third party) a business
opportunity that is discovered through the use of corporate property,
information or position, unless the Company has already been offered the
opportunity and turned it down. More generally, directors and officers are
prohibited from using corporate property, information or position for personal
gain and from competing with the Company.

     Sometimes the line between personal and Company benefits is difficult to
draw, and there are both personal and Company benefits in certain activities.
Directors and officers who intend to make use of Company property or services in
a manner not solely for the benefit of the Company should consult beforehand
with the Code of Ethics Contact Person.

CONFIDENTIALITY

     In carrying out the Company's business, directors and officers may learn
confidential or proprietary information about the Company, its customers,
suppliers, or joint venture parties. Directors and officers must maintain the
confidentiality of all information so entrusted to them, except when disclosure
is authorized or legally mandated. Confidential or proprietary information of
the Company, and other companies, includes any non-public information that would
be harmful to the relevant company or useful or helpful to competitors if
disclosed.

     Confidential information shall not be used for personal gain.

FAIR DEALING

     The Company has a history of succeeding through honest business
competition. The Company does not seek competitive advantages through illegal or
unethical business practices. Each director and officer should endeavour to deal
fairly with the Company's customers, service providers, suppliers, competitors
and employees. No director or officer should take unfair advantage of anyone
through manipulation, concealment, abuse of privileged information,
misrepresentation of material facts, or any unfair dealing practice.

PROTECTION AND PROPER USE OF COMPANY ASSETS

     All directors and officers should protect the Company's assets and ensure
their efficient use. All Company assets should be used only for legitimate
business purposes.

                                        38
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                                   SCHEDULE D

                            AUDIT COMMITTEE CHARTER

PURPOSE OF AUDIT COMMITTEE

     The Audit Committee shall assist the board of directors of the Company (the
"Board") in fulfilling its oversight responsibilities in the following principal
areas: (i) accounting policies and practices, (ii) the financial reporting
process, (iii) financial statements provided by the Company to the public, (iv)
the systems of internal accounting and financial controls, (v) the
qualifications, independence, appointment and oversight of the work of the
external auditors, (vi) the qualifications and performance of the internal
auditors, and (vii) compliance with applicable legal and regulatory
requirements.

     In addition to the responsibilities specifically enumerated in this
Charter, the Board may refer to the Audit Committee such matters and questions
relating to the financial position of the Company and its affiliates as the
Board may from time to time see fit.

MEMBERSHIP

     The Audit Committee shall consist of at least three directors appointed by
the Board as provided for in the By-laws of the Company. The appointment of
members shall occur annually and members are subject to removal or replacement
at any time by the Board. The members shall be selected based upon the
following, in accordance with applicable laws, rules and regulations:

     (a)   INDEPENDENCE.  Each member shall be independent in accordance with
           applicable legal and regulatory requirements and in such regard shall
           have no direct or indirect material relationship with the Company
           which could, in the view of the Board, reasonably interfere with the
           exercise of a member's independent judgment.

     (b)   FINANCIALLY LITERATE.  Each member shall be financially literate or
           must become financially literate within a reasonable period of time
           after his or her appointment to the Audit Committee. For these
           purposes, an individual is financially literate if he or she has the
           ability to read and understand a set of financial statements that
           present a breadth and level of complexity of accounting issues that
           are generally comparable to the breadth and complexity of the issues
           that can reasonably be expected to be raised by the Company's
           financial statements.

     (c)   COMMITMENT.  In addition to being a member of the Audit Committee and
           of any audit committee of any affiliate of the Company, if a member
           of the Audit Committee is also on the audit committee of more than
           two additional public companies, the Board, or the Nominating and
           Corporate Governance Committee, shall determine that such
           simultaneous service does not impair the ability of such member to
           serve effectively on the Company's Audit Committee.

CHAIR AND SECRETARY

     The Chair of the Audit Committee shall be selected by the Board. If the
Chair is not present, the members of the Audit Committee may designate a Chair
for the meeting by majority vote of the members present. The Secretary of the
Company shall be the Secretary of the Audit Committee, provided that if the
Secretary is not present, the Chair of the meeting may appoint a secretary for
the meeting with the consent of the Audit Committee members who are present. A
member of the Committee may be designated as the liaison member to report on the
deliberations of the Audit Committees of affiliated companies.

MEETINGS

     The times and locations of meetings of the Audit Committee and the calling
of and procedures at such meetings, shall be determined from time to time by the
Audit Committee, in consultation with management when necessary, provided that
there shall be a minimum of four meetings per year. The Audit Committee shall
have sufficient notice in order to prepare for each meeting. Notice of every
meeting shall be given to the external and internal auditors of the Company, and
meetings shall be convened whenever requested by the external auditors or any
member of the Audit Committee in accordance with applicable law.

                                        39
<PAGE>

MEETING AGENDAS

     Agendas for meetings of the Audit Committee shall be developed by the Chair
of the Committee in consultation with the management and the corporate
secretary, and shall be circulated to Audit Committee members prior to Committee
meetings.

RESOURCES AND AUTHORITY

     The Audit Committee shall have the resources and the authority to discharge
its responsibilities, including the authority to engage, at the expense of the
Company, outside consultants, independent legal counsel and other advisors and
experts as it determines necessary to carry out its duties, without seeking
approval of the Board or management. The Audit Committee shall have the
authority to conduct any investigation necessary and appropriate to fulfilling
its responsibilities, and has direct access to and the authority to communicate
directly with the external auditors, internal auditors, the general counsel of
the Company and other officers and employees of the Company.

     The members of the Audit Committee shall have the right for the purpose of
performing their duties to inspect all the books and records of the Company and
its subsidiaries and to discuss such accounts and records and any matters
relating to the financial position, risk management and internal controls of the
Company with the officers and external and internal auditors of the Company and
its subsidiaries. Any member of the Audit Committee may require the external or
internal auditors to attend any or every meeting of the Audit Committee.

RESPONSIBILITIES

     The Company's management is responsible for preparing the Company's
financial statements and the external auditors are responsible for auditing
those financial statements. The Committee is responsible for overseeing the
conduct of those activities by the Company's management and external auditors,
and overseeing the activities of the internal auditors. The Company's external
auditors are accountable to the Audit Committee, as representatives of the
Company's shareholders.

     It is recognized that members of the Audit Committee are not full-time
employees of the Company and do not represent themselves to be accountants or
auditors by profession or experts in the fields of accounting or auditing or the
preparation of financial statements. It is not the duty or responsibility of the
Audit Committee or its members to conduct "field work" or other types of
auditing or accounting reviews or procedures. Each member of the Audit Committee
shall be entitled to rely on (i) the integrity of those persons and
organizations within and outside the Company from whom it receives information,
and (ii) the accuracy of the financial and other information provided to the
Audit Committee by such persons or organizations absent actual knowledge to the
contrary.

     The specific responsibilities of the Audit Committee shall include those
listed below. The enumerated responsibilities are not meant to restrict the
Audit Committee from examining any matters related to its purpose.

1.   FINANCIAL REPORTING PROCESS AND FINANCIAL STATEMENTS

     (a)   in consultation with the external auditors and the internal auditors,
           review the integrity of the Company's financial reporting process,
           both internal and external, and any major issues as to the adequacy
           of the internal controls and any special audit steps adopted in light
           of material control deficiencies;

     (b)   review all material transactions and material contracts entered into
           between the Company and any subsidiary with any insider or related
           party of the Company, other than officer or employee compensation
           arrangements approved or recommended by the Management Compensation
           Committee or director remuneration approved or recommended by the
           Nominating and Corporate Governance Committee;

     (c)   review and discuss with management and the external auditors the
           Company's annual audited consolidated financial statements and its
           interim unaudited consolidated financial statements, and discuss with
           the external auditors the matters required to be discussed by
           generally accepted auditing standards in Canada and the United
           States, as may be modified or supplemented, and for such purpose,
           receive and review an annual report by the external auditors
           describing: (i) all critical accounting policies and practices used
           by the Company, (ii) all material alternative accounting treatments
           of financial information within generally accepted accounting
           principles that have been discussed with management of the Company,
           including the ramifications of the use such alternative treatments
           and disclosures and the treatment preferred by the external auditors,
           and (iii) other material written communications between the external
           auditors and management, and discuss such annual report with the
           external auditors;
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<PAGE>

     (d)   following completion of the annual audit, review with each of
           management, the external auditors and the internal auditors any
           significant issues, concerns or difficulties encountered during the
           course of the audit;

     (e)   resolve disagreements between management and the external auditors
           regarding financial reporting;

     (f)   review the interim quarterly and annual financial statements and
           annual and interim press releases prior to the release of earnings
           information;

     (g)   review and be satisfied that adequate procedures are in place for the
           review of the public disclosure of financial information by the
           Company extracted or derived from the Company's financial statements,
           other than the disclosure referred to in (f), and periodically assess
           the adequacy of those procedures; and

     (h)   meet separately, periodically, with management, with the internal
           auditors and with the external auditors.

2.   EXTERNAL AUDITORS

     (a)   require the external auditors to report directly to the Audit
           Committee;

     (b)   be directly responsible for the selection, nomination, compensation,
           retention, termination and oversight of the work of the Company's
           external auditors engaged for the purpose of preparing or issuing an
           auditor's report or performing other audit, review or attest services
           for the Company, and in such regard recommend to the Board the
           external auditors to be nominated for approval by the shareholders;

     (c)   pre-approve all audit engagements and the provision by the external
           auditors of all non-audit services, including fees and terms for all
           audit engagements and non-audit engagements, and in such regard the
           Audit Committee may establish the types of non-audit services the
           external auditors shall be prohibited from providing and shall
           establish the types of audit, audit related and non-audit services
           for which the Audit Committee will retain the external auditors. The
           Audit Committee may delegate to one or more of its members the
           authority to pre-approve non-audit services, provided that any such
           delegated pre-approval shall be exercised in accordance with the
           types of particular non-audit services authorized by the Audit
           Committee to be provided by the external auditor and the exercise of
           such delegated pre-approvals shall be presented to the full Audit
           Committee at its next scheduled meeting following such pre-approval;

     (d)   review and approve the Company's policies for the hiring of partners
           and employees and former partners and employees of the external
           auditors;

     (e)   consider, assess and report to the Board with regard to the
           independence and performance of the external auditors; and

     (f)   request and review a report by the external auditors, to be submitted
           at least annually, regarding the auditing firm's internal
           quality-control procedures, any material issues raised by the most
           recent internal quality-control review, or peer review, of the
           auditing firm, or by any inquiry or investigation by governmental or
           professional authorities, within the preceding five years, respecting
           one or more independent audits carried out by the external auditors,
           and any steps taken to deal with any such issues.

3.   ACCOUNTING SYSTEMS AND INTERNAL CONTROLS

     (a)   oversee management's design and implementation of and reporting on
           internal controls. Receive and review reports from management, the
           internal auditors and the external auditors with regard to the
           reliability and effective operation of the Company's accounting
           system and internal controls; and

     (b)   review the activities, organization and qualifications of the
           internal auditors and discuss with the external auditors the
           responsibilities, budget and staffing of the internal audit function.

4.   LEGAL AND REGULATORY REQUIREMENTS

     (a)   receive and review timely analysis by management of significant
           issues relating to public disclosure and reporting;

     (b)   review, prior to finalization, periodic public disclosure documents
           containing financial information, including the Management's
           Discussion and Analysis and Annual Information Form;

     (c)   prepare the report of the Audit Committee required to be included in
           the Company's periodic filings;

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<PAGE>

     (d)   review with the Company's General Counsel legal compliance matters,
           significant litigation and other legal matters that could have a
           significant impact on the Company's financial statements; and

     (e)   assist the Board in the oversight of compliance with legal and
           regulatory requirements.

5.   ADDITIONAL RESPONSIBILITIES

     (a)   discuss policies with respect to risk assessment and risk management;

     (b)   establish procedures and policies for the following:

        (i)   the receipt, retention and treatment of complaints received by the
              Company regarding accounting, internal accounting controls or
              auditing matters, and

        (ii)   the confidential, anonymous submission by employees of the
               Company of concerns regarding questionable accounting or auditing
               matters;

     (c)   prepare and review with the Board an annual performance evaluation of
           the Audit Committee;

     (d)   review earnings guidance provided to analysts and rating agencies;

     (e)   report regularly to the Board, including with regard to matters such
           as the quality or integrity of the Company's financial statements,
           compliance with legal or regulatory requirements, the performance of
           the internal audit function, and the performance and independence of
           the external auditors; and

     (f)   review and reassess the adequacy of the Audit Committee's Charter on
           an annual basis.

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