Repositioning Strategy - CANCOM on Track withIncreased Third Quarter Revenues.

MISSISSAUGA, Ontario--(BUSINESS WIRE)--July 9, 1997--CANCOM (TSE, ME SAT.) With revenues continuing to increase in the third quarter of fiscal 1997, Cancom (Canadian Satellite Communications Inc.) is pleased to report that its repositioning strategy is consistently meeting its objectives. Revenues

Net income for the first nine months ended May 31, 1997, was $4.1 million or $0.41 per share. This compares with net income of $5.5 million ($0.55 per share) in the same period last year. The change reflects increased depreciation related to the company's significant investment in digital technology. Year-to-date cash flow is $12.1 million or $1.21 per share compared with $12.5 million or $1.25 per share at this time last year.

Cancom's directors are pleased to declare a quarterly dividend of $0.06 per share. This dividend will be paid on the corporation's outstanding common shares on August 31, 1997, to shareholders of record at the close of business on August 11, 1997.

Commenting on the third quarter results, Alain Gourd, Cancom's President and CEO, said: "They confirm that our strategic repositioning plan is on target and that we are moving towards our traditional levels of income and cash flow. After the usual seasonal fluctuations expected over the summer months, I am confident Cancom will regain historical levels of profitability early in fiscal 1998."

BUSINESS HIGHLIGHTS:

- June 3 - Cancom acquired 100 percent of the North American contracts related to the satellite distribution of the American superstation WSBK, the third most-watched superstation both in Canada and the U.S., located in Boston. The new satellite distribution company will be called BOSCOM. WSBK is already licensed in Canada. It reaches approximately 2,000,000 households in the U.S. and 500,000 in Canada. This signal has very good growth opportunity in Canada.

- May 15 - Cancom agreed to invest an additional $2.53 million in ExpressVu which will maintain the combined equity of WIC and Cancom at 10 percent.

- April 25 - Cancom (19.45 percent) partnered with Quebecor (QBR,B) in acquiring the Montreal station TQS, subject to CRTC approval. Other members of the consortium are: COGECO Inc., owner of stations CFKS-TV of Sherbrooke and CFKM-TV of Trois-Rivieres; Radio-Nord Inc., owner of stations CFGS-TV of Hull-Ottawa and CFVS-TV of Val d'Or and Rouyn-Noranda; Radio Saguenay Ltee, owner of station CFRS-TV of Chicoutimi-Jonquiere; and Television MBS Inc., owner of station CFTF-TV of Riviere-du-Loup. Quebecor Inc. remains the controlling member. TQS is already part of Cancom's menu of Canadian signals distributed across Canada. Cancom also ensures full distribution of the signal in TQS territory, particularly to affiliates.

- April 15 - Cancom Business Television (BTV) and Bell concluded a three year agreement whereby they will jointly market satellite-based interactive distance learning (SIDL) and business television services to businesses and organizations across Canada, providing users with a single point of contact. -0-

Financial Highlights

Nine months ended May 31, 1997 and 1996
(thousands of dollars, except per share amounts)
-----------------------------------------------
                            1997           1996
-----------------------------------------------
Revenues
   Broadcast Networks    $33,830        $34,802
   Business Networks      32,536         28,319
   Business Television     8,564          3,997
-----------------------------------------------
Total                    $74,930        $67,118
-----------------------------------------------

Operating margin(x)
   Broadcast Networks    $11,798        $12,148
   Business Networks       5,769          5,646
   Business Television      (346)            61
-----------------------------------------------
Total                    $17,221        $17,855
-----------------------------------------------


Operating income(xx)
   Broadcast Networks     $7,899         $9,613
   Business Networks         822          1,271
   Business Television      (655)          (122)
-----------------------------------------------
-----------------------------------------------

Total                     $8,066        $10,762
-----------------------------------------------

Operating margin(x)
 as a percent of revenue
   Broadcast Networks   35 percent   35 percent
   Business Networks    18 percent   20 percent
   Business Television  -4 percent    2 percent
-----------------------------------------------
Total                   23 percent   27 percent
-----------------------------------------------

Operating income(xx) as a percent of revenue
   Broadcast Networks   23 percent     28 percent
   Business Networks     3 percent      4 percent
   Business Television  -8 percent     -3 percent
------------------------------------------------
Total                   11 percent     16 percent
------------------------------------------------
Net income                 4,058          5,456

Per share
   Net income               0.41           0.55
   Cash flow derived
    from operations         1.21           1.25
   Cash flow
    from operations         0.74           0.12
-----------------------------------------------

(x)  Earnings before depreciation, amortization and interest

(xx) Earnings after depreciation and amortization but before
interest


CANADIAN SATELLITE COMMUNICATIONS INC.
Consolidated Balance Sheets
As at May 31, 1997 and August 31, 1996
(in thousands of dollars)
-----------------------------------------------------
                    May. 31, 1997       Aug. 31, 1996
-----------------------------------------------------
                       (unaudited)         (audited)

ASSETS
Current assets
    Cash            $          -           $1,222
    Accounts receivable   23,065           16,526
    Inventories            4,920            3,432
    Prepaid expenses,
     deposits and other    2,591            1,685
    Income taxes recoverable 419              756
-----------------------------------------------------
                          30,995           23,621
Fixed assets, net         38,075           40,120
Development projects, net  3,618            3,268
Investments                6,657            4,188
Deferred income taxes        722                -
Other assets               2,060            2,088
-----------------------------------------------------
                         $82,127          $73,285
-----------------------------------------------------
-----------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
    Bank indebtedness     $2,949         $      -
    Accounts payable and
     accrued liabilities  12,678            9,835
    Unearned revenue       2,916            1,907
-----------------------------------------------------
                          18,543           11,742
Long-term debt            15,000           15,000

Other long-term obligations  332              256
Deferred income taxes          -              303

Shareholders' equity
    Capital stock         37,620           37,620
    Retained earnings     10,632            8,364
-----------------------------------------------------
                          48,252           45,984
-----------------------------------------------------
                         $82,127          $73,285
-----------------------------------------------------
-----------------------------------------------------

CANADIAN SATELLITE COMMUNICATIONS INC.
Consolidated Statements of Income
Nine months ended May 31, 1997 and 1996
(in thousands of dollars, except per share amounts)
-----------------------------------------------------
(unaudited)                     1997         1996
-----------------------------------------------------

Revenues
      Signal and service     $48,990      $47,422
      Equipment and other     25,940       19,696
-----------------------------------------------------
                              74,930       67,118
Direct costs
      Signal and service      18,408       17,851
      Equipment and other     17,092       13,428
-----------------------------------------------------
                              35,500       31,279
-----------------------------------------------------
                              39,430       35,839
Administration and
 selling expenses             22,209       17,984
Depreciation and amortization  9,155        7,093
Amortissement                  9 155        7 093
Interest expense                 461          597
-----------------------------------------------------
                              31,825       25,674
-----------------------------------------------------

Income before income taxes     7,605       10,165

Income taxes
     Current                   4,572        4,532
     Deferred                 (1,025)         177
-----------------------------------------------------
                               3,547        4,709
-----------------------------------------------------
Net income                    $4,058       $5,456
-----------------------------------------------------
-----------------------------------------------------
Net income per common share    $0.41        $0.55
-----------------------------------------------------
-----------------------------------------------------


CANADIAN SATELLITE COMMUNICATIONS INC.
Consolidated Statements of Cash Flow
Nine months ended May 31, 1997 and 1996
(in thousands of dollars, except per share amounts)
-----------------------------------------------------
(unaudited)                     1997         1996
-----------------------------------------------------

Cash provided by (used for)
Operations
    Net income                $4,058       $5,456
    Items not involving cash
         Depreciation
          and amortization     8,560        6,498
         Amortization of
          development projects   595          595
         Deferred
          income taxes        (1,025)         177
         Other                   (46)        (177)
-----------------------------------------------------
    Cash flow derived
     from operations          12,142       12,549
    Change in non-cash
     operating working
     capital                  (4,745)     (11,346)
-----------------------------------------------------
    Cash flow from operations  7,397        1,203

Financing activities
     Common share dividends   (1,790)      (1,492)
     Increase in long-term debt    -       15,000
     Increase in other
      long-term obligations       76          212
-----------------------------------------------------
                              (1,714)      13,720

Investment activities
     Fixed asset additions    (6,429)     (18,853)
     Investments              (2,469)      (1,972)
     Other, net                 (956)       1,489
-----------------------------------------------------
                              (9,854)     (19,336)
-----------------------------------------------------

Increase (decrease) in cash   (4,171)      (4,413)

Cash, beginning of period      1,222        1,608
-----------------------------------------------------

Cash (bank indebtedness),
 end of period               ($2,949)     ($2,805)
-----------------------------------------------------
-----------------------------------------------------
Cash flow derived from
 operations per common share   $1.21        $1.25

Cash flow from operations
 per common share              $0.74        $0.12
-----------------------------------------------------
-----------------------------------------------------

NOTE TO EDITORS: There is an "at" symbol preceding "cancom.ca" in each of the e-mail addresses below. This symbol may not appear properly in some systems.

CONTACT: CANCOM Canadian Satellite Communications Inc.

Colley Clarke, 905/272-6609

cclark@cancom.ca

or

CANCOM Canadian Satellite Communications Inc.

Patricia Dumas, 905/272-6603

pdumas@cancom.ca