Morgan Stanley: Press Release

Market Wire, December, 2006

This announcement relates to the holdings of Morgan Stanley & Co. Incorporated ("MS&Co.") and Morgan Stanley & Co. International Limited ("MSIL") in SR Telecom Inc. (TSX: SRX) (the "Issuer"). Morgan Stanley is issuing this release in its capacity as the parent holding company of, and indirect beneficial owner of securities held by, MS&Co. and MSIL.

MSIL announces that it has acquired CAD$3,677,558.23 principal amount of convertible term loan ("Convertible Loan") of the Issuer pursuant to the terms and conditions of an agreement made between itself and the Issuer.

MS&Co. currently holds 94,909,200 common shares of the Issuer. Following the closing of the Convertible Loan, Morgan Stanley will beneficially own approximately 15.4% of the issued and outstanding shares of the Issuer on a partially diluted basis (assuming exercise in full of the Convertible Loan held by MSIL) or 13.7% of the issued and outstanding shares of the Issuer on a fully diluted basis (assuming exercise in full by all holders of the Convertible Loan).

Morgan Stanley is ceasing to file reports under Part 4 of National Instrument 62-103 for the Issuer as Morgan Stanley and certain of its affiliates no longer technically qualify to file under Part 4. All securities of the Issuer were acquired through transactions made in the ordinary course of business, and not for the purpose of influencing the control or direction of the Issuer.

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contacts: Morgan Stanley Corporate Communications (212) 726-3154 Website: www.morganstanley.com