annual general meeting

1
2004

• annual general meeting

2

• Darren Entwistle
• member of the TELUS team

3

• leading the way
• consistent strategy

4
agenda

• strategy progress report
• corporate citizenship
• 2003 priorities highlights
• 2004 priorities

5
tracking against strategic imperatives 2000 ?
2004

• build national capabilities
• provide integrated solutions
• focus on growth markets of data wireless
• going to market as one team
• partner, acquire divest as necessary
• invest in internal capabilities

6
1. build national capabilities
TELUS infrastructure - 2000
7
national transformation
8
national wireless transformation

• Key to driving profitable growth
• Subscribers have tripled to 3.5 million ?
• Operating earnings have quintupled to 884
  million ?
• Operating earnings per employee have increased
  89 due to scale efficiencies ?

9
new developments in wireless

• cross-border roaming partnership with Nextel
  enabling Mike Direct Connect? walkie-talkie
  service
• launch of two new Blackberry? devices
• operating on Mike (iDEN) network and national 1X
  wireless data network
• offers a one-stop wireless solution to stay
  connected

10
1. build national capabilities
TELUS infrastructure - 2000
11
build national capabilities
TELUS infrastructure - 2003
12
2. provide integrated solutions

• TD Bank Financial Group win Oct. 2003
• 160 million, 7-year contract for managed data
  solution largest network migration in Canada
• NGN with IP Virtual Private Network (VPN)
  security enhanced services cannot be matched by
  competitors
• please visit our tradeshow following this AGM

13
3. focus on growth markets of data wireless
consolidated revenue profile evolution
20042
20001
LD
Wireless
LD
13
Wireless
23
34
18
Local Voice
Data
30
Local Voice
Data
10
43
Other
19
Other
6
4
7.2B
5.7B
1 12 months ended June 30
2 12 months ended March 31
14
executing our strategy for profitable growth
2003 wireless industry
EBITDA growth
subscriber growth
TELUS Mobility
TELUS Mobility
30
45
1.4M
630M
Source Company reports. Sum of reported net
adds wireless EBITDA for BCE, Rogers Wireless,
Microcell, TELUS Mobility
15
continued industry leadership in wireless average
revenue per subscriber unit (ARPU)
57
2002
55
2003
48
47
47
45
40
38
Microcell
TELUS Mobility
Rogers Wireless
BCE Wireless
Source Company reports
16
high-speed Internet growth
(000s)
Net additions
687
Subscriber base
125
562
152
410
195
215
131
84
58
2004E
2003
2001
2000
2002
17
driving towards leadership in high-speed Internet

• 2004 target of 125,000 new subscribers
• on track in Q1 with 44,000

18
4. going to market as one team
camera phones say it instantly.
19
TELUS advertising ranked top

• Awarded by Marketing Magazine as Canadas
• No. 1 Top-of-Mind awareness
• Top 3 for Most Liked

20
TELUS values
we have the courage to innovate
we embrace change and initiate opportunity
Our values make the future friendly
we have a passion for growth
we believe in spirited teamwork
21
corporate citizenship
22
amateur sports 2010

• Premier founding sponsor for Canadas Olympic
  bid
• TELUS Centre for Sport KidSportTM

23
Video to be played
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corporate citizenship
25
TELUS investment in the community

• member of Dow Jones Sustainability Index
• three consecutive years only North American
  telecommunications company listed
• named Canadas most environmentally friendly
  company in 2003 by Corporate Knights

26
2003 corporatepriorities highlights
27
2003 TELUS corporate priorities
?

• improving Central Canada profitability
• strengthening financial position
• enhancing wireless performance
• improving levels of customer service
• delivering operational efficiency
• reaching a collective agreement

?
?
?
?
2004
28
improving central Canada profitability
Revenue (mil.)
860
EBITDA (mil.)
120
4
2004E
Jan. 2000
1 Includes TELUS Quebec TELUS non-ILEC
operations except 2000
29
improving central Canada profitability

• good progress in 2003, non-ILEC EBITDA ? 78
  million
• focusing on recurring revenue streams
• 2004 affected by focus on larger national deals
• higher quality of business deals going forward

30
strengthening our financial position
1 Based on midpoint of EBITDA guidance
31
improving free cash flow
1.13B to 1.23B
845M
2001
2002
2003
2004E
(140)M
(1.14)B
32
debt rating update

• 2003
• DBRS, SP and Fitch maintained investment grade
  ratings while changing outlook to stable
• Moodys upgraded outlook to stable and then
  positive
• 2004
• Mar. 2nd Moodys upgraded to investment grade
  with stable outlook

33
2003 global telecom performance
21
16
EBITDA1 growth rates
14
13
13
8
3
2
1
BT
PSSW
Sprint
Aliant
BLS
VZ
SBC
ATT
Telia
FT
DT
KPN
TELUS
MTS
Telstra
Nippon
BCE
(0.3)
(2)
(2)
(3)
(5)
As at March 1, 2004 Notes 1
Excluding restructuring TELUS data
based on 2002 2003 results Other
results provided by Bloomberg, company, and
analyst reports
(6)
(14)
(18)
34
2003 global telecom performance
94
Cash Flow (EBITDA1 - Capex) growth rates
63
46
29
20
19
17
7
4
4
3
1
1
ATT
VZ
BT
SBC
Sprint
(0.1)
TELUS
FT
Telia
DT
MTS
FON
BCE
KPN
Aliant
Nippon
BLS
Telstra
PCCW
(4)
As at March 1, 2004 Notes 1
Excluding restructuring TELUS data
based on 2002 2003 results Other
results provided by Bloomberg, company, and
analyst reports
(16)
(24)
35
2004 corporatepriorities
36
2004 priorities

• reaching a collective agreement
• growing brand value through superior customer
  service
• revitalizing wireline growth
• embracing continual cost efficiency
• driving towards leadership in high-speed Internet
  
• enhancing our leadership in wireless

37
wireless customer satisfaction low disconnects
3.2
3.2
2003 monthly churn rates
2.7
2.7
2.6
2.0
1.8
1.6
1.5
1.4
BCE
AWE
TELUS
Verizon
Sprint PCS
Rogers
Nextel
Cingular
Microcell
T-Mobile
38
customer service improvements
?
?
?
?
?
1company report on 19 CRTC quality of service
indicators and standards for March 2004
39
revitalizing wireline growth

• goal to overcome industry wide challenge of
  declining wireline revenue growth
• step change improvements planned
• marketing and sales effectiveness
• excel in delivery
• operationalize lead in IP solutions
• launch new products

40
embracing operational cost efficiency
efficiency program 2001 to
2004E
2003
450M
Cumulative Goals - Savings
550M
454M
Actual
477M at Q1

Net staff reductions target
7,300
NA
Actual
7,500
NA

41
driving towards leadership in high-speed Internet

• 2004 target of 125,000 new subscribers on track
• platform for future services
• Wireless home networking
• IP telephony
• TELUS TV

42
enhancing our leadership in wireless
Q1 on track?
2004E
?
19
12 14
Revenue growth
?
39
23 29
EBITDA growth
?
198M
650 - 700M
Cash Flow (EBITDA less Capex)
43
leading the way with more of the same

• what gets measured gets done
• 19 of 22 consolidated targets achieved in last 4
  years (2000 to 2003)
• public targets set for 2004
• Net income estimated to increase 27 to 420M

44
2004E global telecom performance
projected EBITDA growth rates
7
7
6
4
4
3
3
3
2
1
0.4
VZ
ATT
SBC
BLS
PCCW
KPN
TELUS
(0.4)
FT
DT
MTS
Sprint
Aliant
Telstra
BCE
BT
Nippon
Telia
(1)
(1)
(6)
(8)
As at April 30, 2004 Notes TELUS data based on
2003 results mid-point of 2004 targets
Other estimates provided by Bloomberg, company
and analyst reports
(20)
45
2004E global telecom performance
projected Cash Flow (EBITDA - Capex) growth
rates
14
11
5
4
3
2
1
PCCW
VZ
MTS
BT
ATT
KPN
BLS
SBC
0.4
0.2
TELUS
Aliant
Telia
FT
Sprint
BCE
Telstra
DT
Nippon
(1)
(1)
(3)
(3)
(6)
(9)
(10)
As at April 30, 2004 Notes TELUS data based on
2003 results mid-point of 2004 targets
Other estimates provided by Bloomberg, company
and analyst reports
(28)
46

• leading the way
• consistent strategy

positioned to build value
47
2004

• annual general meeting