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TELUS Mobility

TELUS Mobility. George Cope, President & CEO TELUS Mobility RBC Capital Markets Banff, Alberta February 5, 2004. Forward-Looking Legal Disclaimer.

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TELUS Mobility

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  1. TELUS Mobility George Cope, President & CEO TELUS Mobility RBC Capital Markets Banff, Alberta February 5, 2004

  2. Forward-Looking Legal Disclaimer This presentation contains 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, see TELUS’ Annual Information Form, 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.

  3. Subscribers2 3.3M Revenue (2004E)1 $2.65 to 2.7B EBITDA (2004E)1 $975M to 1.025B about TELUS Mobility a leading N. American wireless service provider CDMA footprint coast to coast 1X iDEN Mike network only one in Canada Spectrum position best in North America Licensed POPs 31.5M: Cdn. Population Network coverage 29.1 million (92%) Strategic relationships Verizon Wireless & Nextel 1 Targets announced December 18, 2003 2 As at September 30, 2003

  4. wireless industry penetration growth prospects 2004E 2006E 44-46% 50-55% 14M+ subs 16-17.5M subs Source: Industry analysts approx. 3 million net adds expected over next 3 yrs

  5. $2.0B wireless industry total industry EBITDA1 YTD Q3-03 YTD Q3-02 TELUS Mobility TELUS Mobility 28% 32% $1.5B Source: Company reports. 1 Sum of reported wireless EBITDA for BCE, Rogers Wireless, Microcell, TELUS Mobility. significant industry EBITDA growth, up 33% YTD

  6. TELUS Mobility TELUS Mobility 34% 46% wireless industry total industry growth YTD Q3-03 industry EBITDA growth subscriber growth 800K $480M Source: Company reports. Sum of reported net adds & wireless EBITDA for BCE, Rogers Wireless, Microcell, TELUS Mobility profitable growth focus over subscriber growth

  7. Source: Company reports ARPU continued industry leadership $57 YTD Q3-02 $55 YTD Q3-03 $47 $47 $46 $45 $40 $38 Microcell TELUS Mobility BCE Wireless Rogers AT&T 20% premium with positive industry trend

  8. ARPU drivers • per minute billing - Jul-02 • evening & weekend clock change - Jun-03 • minutes of use up 20% 3Q03 YTD • roaming/resale agreements • Verizon’s preferred Canadian PCS roaming partner • iDEN roaming with Nextel in U.S. • expanding data offering (intercarrier SMS, 1X) • camera phones & picture messaging

  9. ARPU pricing announcements pricing changes for July 1, 2004 new clients • Caller ID - to increase from $4 to $5/month • Voice Mail • Basic: to go from $3 to $5/month • Advanced: from $5 to $8/month all clients over time • E911 - to increase by $0.25 to $0.50/month

  10. churn YTD Q3-03 3.1% 3.1% 2.7% 2.6% 2.4% 2.4% 2.0% 2.0% 1.9% 1.4% 1.4% 1.4% Microcell T-Mobile PCS Cingular AWE US Avg Rogers CDN Avg Verizon Nextel BCE TELUS TELUS’ YTD churn rate best-in-class in NA

  11. churn reduction drivers • 3 year contracts • improved coverage • significant improvement in drop call rate • expanded national footprint • better phones • grandfathered rate plans • dedicated retention team • improved customer care levels

  12. North American wireless comparison YTD Q3-03 EBITDA Growth 54% 39 36 35 23 20 20 18 14 3 Rogers AT&T TELUS CDN Avg Nextel Sprint PCS US Avg BCE Cingular Verizon Wireless Mobility Wireless Wireless Source: Company reports

  13. North American wireless comparison 2004E EBITDA Growth (analyst estimates) 24 to 30% 17 15 15 13 11 9 9 5 3 TELUS CDN Avg BCE Nextel Verizon Sprint PCS Rogers US Avg AT&T Cingular Mobility Wireless Wireless Wireless Source: Bloomberg & analyst reports, except TELUS (2004 targets over midpoint of 2003 guidance)

  14. North American wireless comparison YTD Q3-03 EBITDA Margins, network revenue (%) 39% 39 39 37 37 35 34 30 29 TELUS Verizon CDN Avg US Avg Cingular AT&T Sprint PCS Rogers Nextel Mobility Wireless Wireless Wireless Source: Company reports

  15. North American wireless comparison 2004E EBITDA Margins, network revenue (%) (analyst est.) 41% 40 38 38 37 33 30 29 27 Cingular Nextel TELUS CDN Avg Verizon Rogers US Avg AT&T Sprint PCS Mobility Wireless Wireless Wireless Source: Morgan Stanley & analyst reports, except TELUS

  16. North American wireless comparison YTD Q3-03 capex intensity (%) 20% 19 18 16 16 15 15 13 13 Cingular Verizon Rogers US Avg CDN Avg AWE Nextel Sprint PCS TELUS Wireless Mobility Source: Company reports

  17. North American wireless comparison 2004E capex intensity (%) (analyst estimates) 18% 17 17 16 16 15 15 15 13 Verizon Cingular Rogers US Avg AT&T Sprint PCS CDN Avg Nextel TELUS Wireless Wireless Wireless Mobility Source: Bloomberg & analyst reports, except TELUS (midpoint of 2004 targets)

  18. TELUS Mobilityoperating cash flow yield Q3-03 YTD 2004E EBITDA margin (service revenue) 39% 40% EBITDA margin (total revenue) 36% 37-38% Capex intensity1 13% 13% Cash flow yield2 23% 24-25% 1 Capex as % of total revenue 2 EBITDA less capex, as a % of total revenue attractive wireless cash flow yields improving

  19. North American wireless comparison YTD Q3-03 cash flow yield1 (%) 24% 23 18 17 16 16 14 13 12 Nextel CDN Avg Verizon Rogers US Avg Sprint PCS AT&T Cingular TELUS Wireless Wireless Wireless 1 EBITDA less capex divided by total revenue Source: Company & analyst reports

  20. North American wireless comparison 2004E cash flow yield1 (%) (analyst estimates) 24% 24 18 17 16 13 12 12 11 TELUS Mobility US Avg Verizon Rogers CDN Avg Sprint PCS AT&T Cingular Nextel Wireless Wireless Wireless 1 EBITDA less capex divided by total revenue Source: Bloomberg & analyst reports, except TELUS (midpoint of 2004 targets)

  21. camera phones launched

  22. picture messaging success approximately half a million pictures sent and received

  23. brand win

  24. brand awareness in Canada TELUS #1 Source: Leger Marketing, January 19, 2004

  25. conclusion TELUS Mobility’s 2004 targets1 reflect continued North American wireless financial leadership • Revenue growth double-digit • EBITDA growth 20%+ • EBITDA margin top quartile in N. America • Cash flow yield 20%+ • Cash flow growth over 50% 1 Targets announced December 18, 2003 TELUS Mobility results creating significant shareholder value

  26. questions?

  27. appendix2004 TELUS Mobility targets 2004 targets1 implied change Revenue $2.65 to 2.7B  15% EBITDA $975 to 1.025B  27% Capex approx. $350M  7% Cash flow2 $625 to 675M  58% Net additions 375 to 425K - 1 Targets announced December 18, 2003. Change based on mid-range of latest 2003 targets 2 EBITDA less capex 2004 targets imply continued strong growth

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