AxiaInvestor Presentation

(All figures in C$ millions unless otherwise noted)

AXX:TSXMay 2014

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Forward-Looking Statements

This presentation contains forward-looking statements, including, without limitation, statements containing the words “should”, “believe”, “anticipate”, “may”, “plan”, “will”, “continue”, “intend”, “expect”, “estimate” and other similar expressions which constitute “forward-looking information” within the meaning of applicable Canadian securities laws.  These statements are based on our current expectations, estimates, forecasts and assumptions about the operating environment, economies and markets in which we operate and are subject to important assumptions, risks and uncertainties that are difficult to predict.  Examples of these statements would include those where Axia forecasts its success and timing in winning new NGN business, the timing of completion and estimated total costs of our networks, the revenues and operating costs associated with these networks over time, and Axia’s ability to generate future cash flows and avail itself of other financing alternatives given current market conditions.

The assumptions, risks and uncertainties that could cause actual results to differ materially from the forward-looking information, include, but are not limited to, changes in customer markets, changes in demand for our services, our inability to deliver services in a timely and cost efficient manner, technological change, general economic conditions and other risks detailed from time to time in our ongoing filings with the Canadian securities regulatory authorities, including those in our Annual Information Form, which filings can be found at www.sedar.com. Given these assumptions, risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.  Unless otherwise required by applicable securities laws, we undertake no obligation to publicly update or revise any forward-looking statements either as a result of new information, future events or otherwise. 

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Delivering Critical Fibre Optic Services

> Axia owns, operates and sells services over fibre optic communications infrastructure

• Recurring bandwidth and dark fibre sales account for over 90% of revenue1

> Focus on non-metro communities in Alberta and France• Over 75% of revenue from business / government end users1

> Differentiated business model• Focus on fibre transport and connectivity gives customer choice of web

services• Leverage government grants/committed spend• Support public policy, deliver infrastructure/competition to under-served

regions

> Axia grows its business by:• Connecting new customers to its networks • Bringing new services to market• Continuing to expand its network footprint1 Based on Business Unit results as defined on page 6

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Balanced Plan To Increase Shareholder Value

> Focused growth and investment in two geographies• Alberta and France have critical mass in terms of profitability, network

infrastructure and favorable operating/regulatory environments• Large, underserved non-metro markets to exploit

> Alberta• Strong base of government business, maintain and extend relationship• Significant opportunity to grow private sector Fibre-to-the-Premise (FTTP)

business in select under-served regions across the province

> France• Substantial growth within existing network footprint as market further

penetrated• Healthy pipeline of new bids

> Returning cash to shareholders• Given confidence in cash generation and potential for future growth

recently initiated quarterly dividend coupled with ongoing Normal Course Issuer Bid

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Company Snapshot

Share Price (May 9/2014) $2.75

52 Week – High/Low $2.89/ $1.24

Market Cap $170m

Shares (m) – Basic/Diluted 63.1 / 64.8

Management & Insiders1 9%

Cash / Debt (Mar 31/2014) $36.7m / $2.0m

Credit Facility $20m senior fixed rate debt / Undrawn

Dividend Quarterly dividend of $0.0125

Normal Course Issuer Bid Renewed Dec/2013

2012 - 2013 purchased 1.7m shares at average cost of $1.42/share

1 Excludes 5m shares held by Bell Canada

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Q1/2014 Business Unit Trends

Q1/14 customer connections grew 13% YoY to 9,826 from 8,677

On Jan 1, 2013, Axia adopted International Financial Reporting Standards (IFRS) 11 which changed reporting for Axia’s French business unit from proportionate consolidation to equity accounting. To aid in the analysis of the business, Axia provides a business unit summary which is the sum of 100% of the financial and operational results of North America, France and Corporate costs.

Q1/14 recurring revenue grew 20% YoY to $27.6m from $22.9m

Q1/14 EBITDA grew 8% YoY to $7.4m from $6.9m

Q1/14 includes $1.8m of startup and growth-related expenses in North America

Jean-Michel SoulierPresident

May 2014C$ millions unless otherwise noted

Year end December

Fibre Optic InfrastructureFor French Communities

7

Background

• Axia led the formation of Covage in 2006– Federal government initiative to deploy fibre throughout France– Large underserved non-metro market

• Covage shareholders – Axia (50%) and Cube Infrastructure Fund (50%)– Each shareholder has 2 representatives on Board of Directors

• Covage has emerged as the leading pure-play fibre infrastructure operator in France– Business is well established and reaching scale

• Our goal is to:1. Further penetrate the market within our existing network footprint

2. Continue to add to network footprint 8

Fibre Infrastructure – Replicable Model

19 community networks • 6,000km of fibre• Long-term concessions or service contracts

National fibre backbone• 3,400km of fibre• Proprietary network with unlimited capacity

Over €300m of capital deployed to date• Combination of shareholder capital and

government grants

130 employees• Fixed cost structure, network build

subcontracted

Wholesale only• Over 150 service providers• Limited customer risk

Covage Summary

9

Funding Structure

• Over €300m of startup and growth capital supplied primarily by shareholders and government grants

• Have maintained a conservative balance sheet with minimal external debt– leaves company well positioned for future investment

10

Key Metrics

• 90% of revenue is recurring• 37% of recurring revenue for lit

services (wavelengths, Ethernet, IP), 26% dark fibre, 34% consumer (FTTH, DSL, fixed wireless) and 3% colocation

• Market penetration currently 11% • For well established networks,

penetration has passed 20% in some cases

• Rate of adoption has been steady as addressable market expanded

11

Key Metrics

• Generating free cash flow prior to growth capital investments

• Success capex related to connecting new customers to our network

• Modest maintenance capex requirements given all new fibre footprint

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Strong Customer Base

13

• Covage sells to over 150 retail service providers– Includes major international, national and regional service providers– Well diversified across network footprint

Large Enterprise

Business /Government

Residential

The Base CaseGrowth Within Existing Footprint

• Increasing market penetration drives higher IRRs– Typical bid model generates a 15% IRR at approximately 15% market

penetration– Goal is to double existing market penetration over the next 5 years

• Free cash flow generation accelerates – Operations can scale without significant increase in headcount

• Modest maintenance capex requirements– Without growth investment, majority of capex is success-based, required to

connect new customers to the network

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Incremental Growth OpportunityThe French High-Broadband Plan

A ten-year plan to provide high-broadband infrastructure to 100% of homes and businesses by 2022 • Combination of public and private funding

Less Dense Areas: 11 million homes and €14bn public investment• Government grants and long-term treasury loans• 50 concession tenders expected in 2014-2015

Dense Areas: 15 million homes and €6bn public investment shared by two operators

High-Broadband Plan Summary

Source Plan France Très Haut Débit 2014Blue area represents 11m homes in less dense areasRed area represents 15m homes in dense areas 15

New Bid Activity – Disciplined Approach

Haute-Savoie• 120,000 homes and

enterprises• 15-year operating

contract

Seine-et-Marne 266,000 homes 30-year concession and

operating contract Extension of existing

Covage concession

Somme• 200,000 homes and

enterprises• 15-year operating

contract

Lyon Metropole• 2nd largest French

metropolitan area• 30,000 enterprises and

20,000 homes• 25-year concession

Yvelines• 100,000 homes and

enterprises• 10-year operating

contract

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Private capital +

Fixed operating cost

structure

• Covage has built pilot FTTH networks that pass 40,000 homes and has been actively selling services for the last 3 quarters

• Aggregate Covage funding requirement for bids displayed: €66 million of equity and debt

Mix of business models

Public capital +

Fixed and variable

operating cost structure

Summary – Continued Growth

• Well established fibre infrastructure operator with significant footprint/scale– Focused on gaining market share, driving higher IRRs

• Active pipeline of incremental growth opportunities– Disciplined approach to deploying new capital– Lever existing operations/assets where possible

• Favorable regulatory and market environment– Well established process to deploy fibre infrastructure– Expanded government program to support fibre to the home (FTTH)– Demand for fibre services is growing

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North American Operations(All figures in C$ millions unless otherwise noted)

1919

Alberta – Positioning for Growth

Overview

Began operations in 2005, over 8,000 fibre miles, connects every community in the province. Education, Health, GoA, Libraries, Municipalities 80% of revenue, private sector accounts for remainder.

By mid-2015 Axia will operate what it believes is the most comprehensive, highest quality, most resilient fibre network in the province supported by upgraded network electronics and OSS/BSS systems. Mid-2015 new $6m local access fee to Bell offset by elimination of facility fee ($2.8m annualized currently).

Committed government spend through mid-2018. Large fibre-to-the-premise opportunity to exploit.

Key Metrics

Headcount 140

Infrastructure Replacement Cost

$380m

Axia Investment $40m

Axia Ownership 100%

Customer Connections 5,034

* 1Q14 includes $1.3m of startup and growth-related expenses tied to the successful launch of a new OSS/BSS system and FTTP growth initiative.

2020

Western Massachusetts

> Government funded network build. Committed base of government business, 10 year extendable operating agreement signed in 2011

> Potential upside from success-based FTTP capital investments

• Connect government facilities not part of committed base of business• Long-term IRU provides ability to develop private sector business• FTTH potential

> Network build completed early 2014, operations at early stage

• Currently over 200 customer connections in process

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Investment Summary

> Differentiated provider of critical fibre-based communications infrastructure

> Focused growth and investment in two key geographies;• Long track record of profitable operations in Alberta

> Select investments to open up large FTTP opportunity in private sector market

• French business has reached operational inflection point> Further penetrate market within existing network footprint> Pipeline of attractive potential new bids

> Prudent return of cash to shareholders

> Strong balance sheet