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Technology Conference

Technology Conference. George Cope President & CEO, TELUS Mobility May 6, 2004. Forward-looking legal disclaimer. All dollars in C$ unless otherwise specified.

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Technology Conference

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  1. Technology Conference George Cope President & CEO, TELUS Mobility May 6, 2004

  2. Forward-looking legal disclaimer All dollars in C$ unless otherwise specified These annual meeting presentations 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, see TELUS’ 2004 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.

  3. about TELUS • Canada’s 2nd largest telco - only national pure-play, facilities-based, full-service telecom provider • Executing national growth strategy focused on data, IP & wireless • 2004ERevenues $7.45 to 7.55B,  4 to 6% EBITDA $2.95 to 3.05B,  5 to 8% FCF $1.1 to 1.2B,  33 to 46% • Operating segments: Communications: wireline Mobility: wireless • Enterprise value: ~$16B (equity ~ $8.0B) • Daily trading1: 1.5M shares 1 recent 3 month average. TSX: T, T.A; NYSE: TU

  4. Focus on growth markets of data & wireless LD LD Wireless 13% 23% 34% Wireless 18% Local Voice 30% Data Local Voice Data 10% 43% Other 19% Other 6% 4% Data & wireless revenues from 28% to 53% in 3.5 yrs consolidated revenue profile evolution 2004 2000 $5.7B $7.2B 12 months ended June 30 12 months ended March 31

  5. 2004 – first quarter review Earnings and profitability continue to improve TELUS consolidated Q1-03 Q1-04 Change Revenue $1.74B $1.80B  4% EBITDA1 $664M $721M  9% Net Income $90M $101M  13% EPS $0.26 $0.28  8% Free Cash Flow2 $268M $443M  66% 1Includes restructuring & workforce reduction costs of $15.9M & $6.5M for Q1-04 & Q1-03, respectively 2 Free Cash Flow defined as: EBITDA (including restructuring & workforce reduction costs) less capex, net cash interest, net cash taxes, cash restructuring payments, and excess share compensation expense over share compensation payments. .

  6. TELUS Mobility

  7. 4 million or more net adds expected over next 3 yrs Canadian wireless penetration growth prospects 2003 2004 2007E 42% ~46% 55-58% 13.4M subs ~15M subs 18-19M subs Source: Industry analysts

  8. Subscribers: 3.5M Revenue (2004E)1 : $2.65 to 2.7B EBITDA (2004E)1 : $1.0B to 1.05B about TELUS Mobility leading Canadian national wireless provider CDMA footprint: coast to coast 1X iDEN Mike network: only one in Canada (Nextel in US) Spectrum position: best in North America Licensed POPs: 31.7M: Cdn. Population Network coverage: 29.5M (93%) Strategic relationships: Verizon Wireless & Nextel 1Guidance as per May 5, 2004 update

  9. 56% compounded EBITDA growth rate over four years TELUS Mobility EBITDA growth $1.0 to 1.05B1 $815M $535M $356M $173M 2000 2001 2002 2003 2004E EBITDA 1Guidance as per May 5, 2004 update

  10. TELUS Mobility Q1 results

  11. Net additions up 14%, with 49% postpaid growth Net additions 76k Prepaid 67k Postpaid Q1-03 Q1-04

  12. Network revenue up record $100M or 20% Network revenue growth $592M $492M Q1-03 Q1-04

  13. Fifth consecutive quarter of YoY ARPU increases ARPU increasing $57 $54 Q1-03 Q1-04 Average Revenue Per Unit ($/month)

  14. Source: Company reports 20% premium with positive industry-wide trend ARPU - continued industry leadership Q1-03 $57 $54 Q1-04 $47 $47 $45 $44 $37 $36 Microcell TELUS Mobility BCE Wireless Rogers Wireless

  15. ARPU drivers • Price changes continue to roll through the base • per minute billing - Jul-02 • evening & weekend clock change - Jun-03 • others to come in 2004 • minutes of use up 21% in 2003, 15% in Q1-04 • roaming/resale agreements • Verizon’s preferred Canadian PCS roaming partner • iDEN roaming with Nextel in U.S. • expanding data offering (intercarrier SMS, 1X)

  16. 1.53% 1.49% 1.33% 1.17% Q1-03 Q1-04 Q1-03 Q1-04 postpaid-only churn blended monthly churn Continued focus on retention evident with postpaid churn down to 1.17% Churn low & stable

  17. 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 • excellent customer care levels

  18. Q1-03 Q1-04 ARPU $54 $57  Blended churn 1.5% 1.5% - COA $425 $383  Lifetime revenue $3,500 $3,800  COA/ Lifetime revenue 12% 10%  Subscriber economics improving profitable subscriber growth

  19. $248M EBITDA margin1 (network revenue) $179M 42% 36% Q1-04 Q1-03 WirelessEBITDA ($) 1 EBITDA on total revenue 33% and 39% EBITDA growth of 39% & EBITDA margin of 42% EBITDA growth & margin expansion

  20. TELUS Mobility 45% TELUS achieving profitable subscriber growth Profitable subscriber growth strategy 12ME Q1-04 subscriber growth 12ME Q1-04 EBITDA growth TELUS Mobility 29% 1.5M $650M Source: Company reports. Sum of reported net adds & wireless EBITDA for BCE, Rogers Wireless, Microcell, TELUS Mobility

  21. Capex intensity (total revenue) $54M $50M 10% 8% Q1-04 Q1-03 Wireless capex ($) Continued improvement in capex intensity Capex & capex intensity declining

  22. Capex drivers • Leading spectrum position- minimal cell splitting • CDMA/1X roaming/resale agreements in Central & Eastern Canada • Network digitization largely complete • 1X network implemented, voice capacity improvement • Mike (iDEN) network largely built out

  23. Cash flow increased by more than $73 million or 59% Cash flow (EBITDA less capex) $198M $124M Q1-04 Q1-03 Wireless cash flow ($)

  24. Attractive wireless cash flow yield well above plan operating cash flow yield Q1-04 2004E EBITDA margin (service revenue) 42% 40% EBITDA margin(total revenue) 39% 37-38% Capex intensity1 8% 13% Cash flow yield2 31% 24-25% 1 Capex as % of total revenue 2 EBITDA less capex, as a % of total revenue

  25. Cash flow yield target of 25% in 2004 best in class Q1 cash flow yield - North America EBITDA less Capex / Total Revenue 31% 21% 16% 15% 15% 15% 15% 6% AWE PCS Nextel Rogers Verizon US Avg TELUS Cingular Source: Company reports

  26. what’s new?

  27. 350M text messages sent in 2003 – double 2002’s 174M! Text messaging 350M 174M 2002 2003 # of text messages sent & received in Canada

  28. Picture messaging • award-winning marketing campaign • significant share of sales by end of 2004 • early usage stats encouraging Worldwide • 29 billion digital images captured this year • 2003: One in six wireless phones sold had digital camera

  29. Download delights Disney Hockey

  30. 1X US data roaming

  31. North American iDEN Direct Connect

  32. Blackberry New devices, US roaming on both iDEN & PCS Colour screen Push to Talk Blackberry 7510 - iDEN Blackberry 7750

  33. TELUS Mobility results creating significant shareholder value Conclusion TELUS Mobility is a North American leader & premium Canadian wireless operator • Network rev. growth 20%  $100M • ARPU $57  $3 • Churn 1.5%  4 bpts • COA $383  10% • EBITDA growth 39%  $69M • EBITDA margin 42%  5.5 pts • Cash flow yield 31%  7.8 pts • Cash flow ($) $198M  $73M

  34. questions?

  35. investor relations 1-800-667-4871 telus.com ir@telus.com

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