3 Q11 Canada Mobile Forecast Executive Summary

3Q.2011 Canada Mobile Operator ForecastCanada to have 32.1 million mobile subscriber connections in 2015 with Bell Mobility taking 25% market share

October 2011

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© 2011 IE Market Research Corp.All rights reserved.

Source: IEMR

INDUSTRY AVERAGE SUBSCRIBER GROWTH IN THE CANADIAN WIRELESS MARKET REMAINS IN THE RANGE OF 6%-8%

The operator-wide average subscriber growth (YoY) was 6.7% in 2Q.2011, down from 6.9% in 2Q.2010.

Bell Mobility saw its subscriber growth (YoY) decrease from 6.3% in 2Q.2010 to 2.4% in 2Q.2011.

Subscriber growth (YoY) at Rogers Wireless improved from 5.7% in 2Q.2010 to 5.9% in 2Q.2011.

Telus Mobility's subscriber growth (YoY) fell from 6.5% in 2Q.2010 to 5.9% in 2Q.2011.

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Bell Mobility Inc. Rogers Wireless Inc. Telus Mobility Industry Total

Chart 1: Subscriber Growth (4Q08 – 2Q11), %

Stable subscriber growth continues in Canada6.7% industry average subscriber growth in 2Q.2011

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Source: IEMR

INDUSTRY AVERAGE ARPU IN CANADA IS STABILIZING

The industry average monthly ARPU was C$57.03 in 2Q.2011, down from C$58.70 in 2Q. 2010.

ARPU growth rate at Bell Mobility declined from 4.7% in 2Q.2010 to -1.0% in 2Q.2011.

ARPU growth rate (YoY) at Rogers Wireless declined from 0.8% in 2Q.2010 to -5.2% in 2Q.2011.

ARPU growth rate at Telus Mobility was 3.3% in 2Q.2011, up from -2.3% in 2Q.2010.

Chart 2: ARPU Growth (4Q08 – 2Q11), %

ARPU growth in Canada has turned negative-2.8% industry average ARPU growth in 2Q.2011

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Source: IEMR

The operator-wide average Minute of Use (MOU) per subscriber was 355 minutes per month in 2Q.2011, down -8.5% YoY.

MOU per subscriber at Bell Mobility, Rogers Wireless and Telus Mobility was 282 minutes, 475 minutes, and 337 minutes respectively in 2Q.2011.

MOU/Sub growth was negative at both Rogers Wireless and TelusMobility. MOU/Sub growth (YoY) at Rogers Wireless was -4.2% in 2Q.2011 which is the same as in 2Q.2010.

On the other hand Bell Mobility saw its MOU/Sub growth rise from -2.1% in 2Q.2010 to -0.7% in 2Q.2011.

Chart 3: MOU/Sub Growth (4Q08 – 2Q11), %

Minutes of Use per Subscriber is decreasingIndustry average MOU/Sub is approximately 355 minutes per month

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Source: IEMR

-1.7% INDUSTRY-AVERAGE EBITDA GROWTH IN 2Q.2011

The industry average EBITDA growth rate (YoY) in 2Q.2011 was -1.7%, down from 5.2% in 2Q.2010.

EBITDA growth rate at Bell Mobility rose from -2.1% in 2Q.2010 to -1.7% in 2Q.2011.

EBITDA growth rate (YoY) at Rogers declined from 9.8% in 2Q.2010 to -3.1% in 2Q.2011.

EBITDA growth rate at Telus Mobility was 8.0% in 2Q.2011, up from 2.3% in 2Q.2010.

Chart 4: EBITDA Growth (4Q08 – 2Q11), %

EBITDA growth in Canada remains positive-1.7% industry average EBITDA growth in 2Q.2011

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Source: IEMR

We forecast that the number of total wireless subscriber connections in Canada will increase from 25.4 million in the end of 2010 to 32.1 million in the end of 2015.

Given the latest quarter numbers, our model predicts that Bell Mobility will have approximately 7.9 million mobile subscriber connections in 2015.

We expect that Rogers Wireless will have 11 million wireless subscribers in 2015 (34.2% market share).

In our view, Telus Mobility will have 8.3 million mobile subscribers in Canada with a 25.7% market share in 2015.

Chart 5: Subscribers by operator (CY09 – CY15F)

So what is IEMR’s Forecast? Total mobile subscriber connections in Canada to reach 32.1 million in 2015

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Bell Mobility Inc. Rogers Wireless Inc. Telus Mobility

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Source: IEMR

WE EXPECT THE OPERATOR-WIDE AVERAGE ARPU LEVEL TO REMAIN STABLE OVER THE NEXT TWO YEARS

Our forecasting model predicts that monthly ARPU levels in Canada will remain at about C$58 – C$59 over the forecast period, 2011 - 2013.

We expect that Telus Mobility’s ARPU level will be the highest in Canada’s wireless market in 2013 at C$62.60.

Chart 6: Average Revenue per User (ARPU) per month (CY09 – CY13F), CAD

So what is IEMR’s Forecast?Industry average ARPU in Canada will be stable over the next two years

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Bell Mobility Inc. Rogers Wireless Inc. Telus Mobility Average

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Source: IEMR

WE EXPECT ROGERS WIRELESS TO ENJOY HIGHEST EBITDA MARGIN OVER THE NEXT TWO YEARS

Our model is predicting that, over the forecast period of 2011-2013, Rogers Wireless’s EBITDA margins will remain higher than those of Bell Mobility and Telus Mobility at about 46% - 48%.

We forecast that Bell Mobility's EBITDA margin (calculated as EBITDA/service revenue) will be approximately 41% in 2013.

We expect that Telus Mobility’s EBITDA margin will increase from 39.1% in 2010 to 46.7% in 2013

Chart 7: EBITDA margins (CY09 – CY13F), %

So what is IEMR’s Forecast? Rogers Wireless to enjoy higher profitability than Bell and Telus

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Bell Mobility Inc. Rogers Wireless Inc. Telus Mobility Average

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3 Q11 Canada Mobile Forecast Executive Summary

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