Darren Entwistle Member of the TELUS Team October 5, 2004 Communacopia XIII Conference.

Darren EntwistleMember of the TELUS Team

October 5, 2004

Communacopia XIII Conference

2

This presentation and answers to questions contain forward-looking statements about expected future events and financial and operating results that are subject to risks and uncertainties. TELUS’ actual results, performance, or achievement could differ materially from those expressed or implied by such statements. For additional information on potential risk factors including those associated with the potential completion of the Microcell bid, see TELUS’ Annual Information Form, the Offers to Purchase and Circular, and other filings with securities commissions in Canada and the United States.

TELUS disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

All dollars in C$ unless otherwise specified.

forward-looking statement

leading the way

…consistent strategy

4

As at August 4, 2004

Note: TELUS data based on 2003 results & mid-point of 2004 guidance Other estimates provided by Bloomberg, company and analyst reports

projected EBITDA % growth rates

75 4 4

2 2

(4)(6) (7)

(30)

0.10.51

5

(0.2)(2) (2)

TELUS FT DT BCE Sprint Telstra BT VZ Aliant KPN

Nippon PCCW SBC Telia MTS BLS AT&T

2004E global telecom performance

5


Note: TELUS data based on 2003 results & mid-point of 2004 guidance Other estimates provided by Bloomberg, company and analyst reports

10 10

65

4

1

(4) (5) (5)

(9)

(17)

(25)

(0.6)(2)

(1)(0.5)

9

TELUS Sprint Aliant BCE VZ FT Telstra

SBC Nippon DT Telia PCCW BT BLS KPN MTS AT&T

projected Cash Flow (EBITDA - Capex) % growth rates

2004E global telecom performance

6

about TELUS

financial update

strategy

corporate priorities

investor considerations

agenda

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2nd largest Canadian telco executing national growth strategy focused on data, IP &

wireless from position of financial strength

2004E1: Revenues $7.45 to 7.55B

EBITDA2 $2.975 to 3.075B

FCF $1.15 to 1.25B

Enterprise value: $16.5B (~ $9B equity)

Listings: TSX: T, T.A; NYSE: TU

Daily Trading3 1.1 million shares

Operating segments: wireline: TELUS Communicationswireless: TELUS Mobility

1 Updated guidance on August 6, 2004 2 Earnings before interest, taxes, depreciation & amortization, after restructuring & workforce reduction costs. 3 Recent 6 month average

about TELUS

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about TELUS Mobility

31.8M: Cdn. PopulationLicensed POPs:

29.7M (93%)Network coverage:

best in North AmericaSpectrum position:

only one in Canada (Nextel in US)iDEN Mike network:

coast to coast 1XCDMA footprint:

$1.05B to 1.1B 29 to 35%EBITDA (2004E)1 :

$2.675 to 2.725B 13 to 16%Revenue (2004E)1 :

3.6MSubscribers:

leading Canadian national wireless provider

1 Updated guidance on August 6, 2004

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ILEC: full service in W. Canada and E. Quebec non-ILEC: data & IP for businesses in Central Canada

Revenue (2004E)1 $4.7 to 4.8B -2 to 0%

EBITDA (2004E)1 $1.925 to 1.975B -4 to -1%

Ntwk access lines 4.8M

Internet subs 925K total / 624K high-speed

Fibre IP backbone national


about TELUS Communications

10 Voice focused balanced growth

$5.7B

43%

18%

10%

6%Other

12ME Q2, 2004

$7.3B

Local Voice

Wireless

Data29%

35%

19%

4%Other

LD

Wireless

12ME Q2, 2000

Local Voice

23%

Data

13%

LD

TELUSCommunications

TELUSCommunications

TELUSMobility

TELUSMobility

consolidated revenue profile evolution

28% 54%

} }

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financial update

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$274M$163MNet Income

$0.76$0.46EPS2

4.4%$3.67B$3.51BRevenue

$1.51B$1.38BEBITDA1

YTD Q2, 2004 change YTD Q2, 2003

1 After restructuring & workforce reduction costs of $17M & $ 10M for YTD Q2-04 & YTD Q2-03, respectively.2 Incl. impacts of tax settlements & related interest of approx. $0.17 & $0.15 in YTD Q2-04 & YTD Q2-03,

respectively.

significant earnings & free cash flow generation

$340M$673M$333MFree Cash Flow3

3 Defined as EBITDA, adding Restructuring and workforce reduction costs, cash interest received and excess of share compensation expense over share compensation payments, subtracting cash interest paid, cash taxes, capital expenditures, and cash restructuring payments.

2004 YTD review - consolidated

9.1%

65%

68%

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Mobility’s share of TELUS’ EBITDA & cash flow

28%

36%

Q2Q2EBITDA

30%

47%

Q2Q2 EBITDA less capex

Mobility generating ~ ½ of consolidated cash flow in Q2

2003

2004

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2004 guidance implies significant improvement in profitability, cash flow & leverage

approx. 1.3B$1.25BCapex

$1.15B to 1.25B

$1.30 to 1.50

$2.975 to 3.075B

$7.45 to 7.55B

current 2004 guidance1

$845M

$0.92

$2.82B

$7.15B

2003 actuals

EPS

Free Cash Flow

EBITDA

Revenue

< 2.3x2.6xNet Debt : EBITDA

change

0.3x

4%

36 to 48%

41 to 63%

6 to 9%

4 to 6%


2004 financial outlook - consolidated

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strategy

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strategic imperatives 2000-2004

Provide integrated solutions

Invest in internal capabilities

Going to market as one team

Partner, acquire & divest as necessary

Build national capabilities

Focus on growth markets

… to unleash the power of the Internet to deliver the best solutions to Canadians at home, in the workplace and on the move

consistent strategy

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strategic journey highlights purchase of Quebec Tel

purchase of national wireless operator Clearnet

divestiture of non-core assets

completion of national IP backbone & fibre network

first in N.A. to launch Next Generation Network, enabling offer of IP-based solutions to customers

won landmark national managed data solutions contract with IBM Canada for TD Bank

# 1 ranked North American wireless company

2000

2004

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build national capabilities

TELUS’ infrastructure - 2000

19

build national capabilities

TELUS’ infrastructure - 2004

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corporate priorities

21

2004 six corporate priorities

Reaching a collective agreement

Growing brand value through superior customer service

Embracing continual cost efficiency

Revitalizing wireline growth

Driving towards leadership in high-speed Internet

Enhancing our leadership position in wireless

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Operational Efficiency Program (OEP) phases I to III during 20012004

on track for cumulative annual savings of ~$550M for 2004 & onwards

incremental savings of ~$100M in 2004 with $50M achieved June 30 YTD

7,550 net staff reductions

combining Business & Client Solutions into one business unit to improve efficiency & effectiveness under leadership of Joe Natale (H2 2004)

rationalizing IT systems over 2-3 years

view successful 2001-2004 OEP as platform for

embedding ongoing improvements

embracing continual cost efficiency

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geographic expansion

high quality, recurring, IP-based revenues in Central Canada

leverage technological leadership and service differentiation that TELUS Next Generation Network (NGN) provides

bundling & price increases

TELUS bundling strategy protects legacy revenues

LD: bundled with high-speed Internet and increased system access fee

home communication solutions

continuing high-speed Internet growth

TELUS future friendly home

revitalizing wireline growth

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driving towards leadership in high-speed Internet 2004 target of 125,000 new subscribers

on track in H1-04 with 63,000

first to market with new services

Spam Control

anti-virus

ad Block

PureradioTM

PuretracksTM

security bundles

driving towards leadership in high-speed Internet

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Total Internet subscribers

67%

High Speed

33%Dial-up

925K

continued market share growth

35%

30%

39%

TELUS high-speed market share1

Q2-03Q2-02 Q2-04

1 In ILEC operating areas

driving towards leadership in high-speed Internet

26 4 to 5 million net adds expected over next 3.5 yrs

Source: Industry analysts

2003

42%

2007E

55-59%

2004YTD

44%

13.4Msubs

18-19Msubs

13.9Msubs

Canadian wireless penetration growth prospects

27TELUS achieving profitable subscriber growth

$737M1.5M

12ME Q2, 2004 Industry EBITDA growth

12ME Q2, 2004Industry subscriber growth

Source: Company reports. Sum of reported net adds & wireless EBITDA for BCE, Rogers Wireless, Microcell, TELUS Mobility

TELUSMobility

40%31%

TELUSMobility

profitable subscriber growth strategy

enhancing our leadership position in wireless

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TELUS Mobility BCE WirelessRogers Wireless

$55

$46$45

Source: Company reports

$58

$48$49

Microcell

$38 $39

continued leadership in ARPU

YTD Q2, 2003

YTD Q2, 2004

significant premium with positive industry-wide trend


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leading performance in churn

BCE T-Mobile

2.7%

2.3%

1.4%

1.8%1.6%

1.3% 1.3%

TELUSNextelSprint PCS

Rogers Verizon

3.5%

CingularMicrocell

3.4%2.8%

AT&T

TELUS’ Q2 churn rate is best-in-class


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lifetime revenue1 per customer improvement

YTD Q2-03

$2,800

YTD Q2-04YTD Q2-02

$3,900$4,100

TELUS subscriber economics continue to improve

1 ARPU / Churn


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North American iDEN Direct Connect

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how does TELUS Mobility measure up?

Sources: TELUS estimates. Cdn. Statistics - Company Reports; US Statistics - Morgan Stanley1 Projected capex as a % of forecast total revenue. 2 Projected EBITDA less projected Capex divided by projected total revenues

3 Projected wireless penetration gain divided by # of carriers in market. For TELUS, projected net adds divided by projected covered POPs

Penetration gain/carrier3

No. of carriers in market

Mkt penetration (cov. POPs)

Cash flow yield2

Capex intensity1

Annual EBITDA growth rate

EBITDA margin

0.5%

6 to 8

58%

12%

19%

27%

32%

US Avg

2004E

1.0%

3 to 4

46%

21%

16%

31%

37%

Cdn Avg

2004E

1.3%

-

13%

27%

13%

32%

40%

TELUS 2004 guidance

TELUS Mobility is best-in-class in fundamentally

stronger 3 to 4 player Canadian wireless industry

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TELUS Mobility ranked #1 in North America

#1. TELUS Mobility

2. Verizon Wireless

3. Nextel

4. Alltel

5. Bell Mobility

6. Alamosa PCS

7. Nextel Partners

8. AirGate PCS

9. Sprint PCS

10. T-Mobile (USA)

11. Rogers Wireless

12. Western Wireless

13. US Cellular

14. Cingular

15. US Unwired

16. Ubiquitel

17. MetroPCS

18. AT&T Wireless

19. Leap Wireless

20. Dobson

21. Triton PCS

22. Microcell

Source: N. Moore Capital, Value Metric Rankings, Q2-04


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35

continue EBITDA growth

Regulatory Pressure

Competitive Intensity

Technology Substitution + +Digital Home

Non-ILEC Growth

Organization Effective-

ness+ +

Tip the scales and hold EBITDA flat for the wireline business

=Growth in revenues and EBITDA from the wireless business

Continued improvements in revenues and EBITDA for TELUS

≥


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TELUS Mobility high proportion of consolidated revenue & cash

flow most profitable wireless carrier in North America

TELUS Communications good results relative to peers robust revenue composite with small exposure to

LD

continued material debt & leverage reduction

generating significant cash & earnings growth

pure play telecom operating company with strong

growth profile

leading the way…

why invest in TELUS

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improving free cash flow

2001 2002

2003

$(1.14)B

$(140)M

$1.15B to 1.25B

2004E

$845M


TELUS subscriber economics continue to improvestrong track record of FCF generation: ~40% in 2004

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projected EPS % growth rates


Notes: TELUS data based on 2003 results & mid-point of 2004 guidance Other estimates provided by Bloomberg and company reports

136%

100

4943 42

28

(3) (3) (5) (5)

(46) (46)

(78)

71015

52

Nippon FT TELUS MTS Telia DT KPN PCCW Telstra BCE

SBC BLS VZ Aliant BT Sprint AT&T

2004E global telecom performanceinvestor considerations

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excellence in corporate governance ranked 9th by Corporate Essentials, “Annual Report of Annual

Reports” – only global ranking of ARs

1st in Canada; 2nd in North America

ranked #1 in world for “strategy, objectives & outlook”

nine years of disclosure excellence in corporate reporting awards by Canadian Institute of Chartered Accountants

IR website ranked 3rd in both Canada and among global telecom companies by IR Web Report

member of DJSI for four consecutive years – only North American telecommunications company listed

recognized as Canada’s Best Environmental Corporate Citizen

e.ComReport Watch

questions?

investor relations

1-800-667-4871telus.com [email protected]

http://www.telus.com/

Darren Entwistle Member of the TELUS Team October 5, 2004 Communacopia XIII Conference.

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Transcript of Darren Entwistle Member of the TELUS Team October 5, 2004 Communacopia XIII Conference.