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2004 Media & Telecom Conference

2004 Media & Telecom Conference. George Cope President & CEO, TELUS Mobility September 14, 2004. forward-looking statement.

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2004 Media & Telecom Conference

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  1. 2004 Media & Telecom Conference George Cope President & CEO, TELUS Mobility September 14, 2004

  2. forward-looking statement 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.

  3. Subscribers: 3.6M Revenue (2004E)1 : $2.675 to 2.725B ( 13 to 16%) EBITDA (2004E)1 : $1.05B to 1.1B ( 29 to 35%) 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: 31.8M: Cdn. Population Network coverage: 29.7M (93%) Strategic relationships: Verizon Wireless & Nextel 1Guidance provided August 6, 2004

  4. Q2-03 Q2-04 12ME Population 31.5M 31.8M Net subscriber additions 1.2M 1.5M Cdn wireless market 12.4M 13.9M Penetration 39.4% 43.8% Penetration gain 3.5% 4.4% Canadian subscriber growth re-accelerating

  5. 4 million or more net adds expected over next 3 yrs Canadian wireless penetration growth prospects 2003 2004 2007E 42% ~46% 55-59% 13.4M subs ~15M subs 18-19M subs Source: Industry analysts

  6. Industry EBITDA up 33% YTD Total industry EBITDA1 YTD Q2-04 YTD Q2-03 TELUS Mobility 31% TELUS Mobility 33% $1,213M $1,617M Source: Company reports. 1 Sum of reported wireless EBITDA for BCE, Rogers Wireless, Microcell and TELUS Mobility

  7. 56% compounded EBITDA growth rate over four years TELUS Mobility EBITDA & cash flow growth EBITDA $1,050 to 1,1001 EBITDA less capex $815 ($M) $6751 $535 $455 $356 $173 $75 2000 2001 2002 2003 2004E $(288) $(360) 1Guidance provided August 6, 2004

  8. Net additions up 12% YTD, with 35% postpaid growth Net additions 190K Postpaid 170K Prepaid YTD Q2-03 YTD Q2-04

  9. Network revenue up 20%. Total revenue up 19% Network revenue growth $1,218M $1,019M YTD Q2-03 YTD Q2-04

  10. Source: Company reports significant premium with positive industry-wide trend ARPU - continued industry leadership YTD Q2-03 $58 $55 YTD Q2-04 $49 $48 $45 $46 $39 $38 Microcell TELUS Mobility Rogers Wireless BCE Wireless

  11. ARPU drivers • Price changes continue to roll through the base • per minute billing - Jul-02 • evening & weekend clock change - Jul-03 • select calling features - Jul-04 • minutes of use up 21% in 2003, 14% YTD Q2-04 • expanding data offering (intercarrier SMS, 1X & RIM) • roaming/resale agreements • Verizon’s preferred Canadian PCS roaming partner • iDEN roaming with Nextel in U.S.

  12. 1.4% 1.4% 1.2% 1.1% YTD Q2-03 YTD Q2-04 YTD Q2-03 YTD Q2-04 postpaid-only churn blended monthly churn Continued focus on retention evident with postpaid churn down to 1.0% in Q2 Churn low & stable

  13. 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

  14. YTD Q2-03 YTD Q2-04 ARPU $55 $58  Blended churn 1.4% 1.4% - COA $427 $382  Lifetime revenue $3,900 $4,100  COA/ Lifetime revenue 11% 9%  Subscriber economics continue to improve profitable subscriber growth

  15. $534M EBITDA margin1 (network revenue) $380M 44% 37% YTD Q2-04 YTD Q2-03 WirelessEBITDA 1 EBITDA margin on total revenue 34% YTD Q2-03, and 41% YTD Q2-04 EBITDA growth of 41% & EBITDA margin of 44% EBITDA growth & margin expansion

  16. TELUS achieving profitable subscriber growth Profitable subscriber growth strategy 12ME Q2-04 subscriber growth 12ME Q2-04 EBITDA growth TELUS Mobility TELUS Mobility 31% 40% 1.5M $737M Source: Company reports. Sum of reported net adds & wireless EBITDA for BCE, Rogers Wireless, Microcell, TELUS Mobility

  17. Continued improvement in capex intensity Capex intensity declining Capex intensity (total revenue) $132M $129M 12% 10% YTD Q2-04 YTD Q2-03 Wireless capex

  18. 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

  19. Cash flow increased by $158 million or 64% in 1H04 Cash flow (EBITDA less capex) $405M $248M YTD Q2-04 YTD Q2-03 Wireless cash flow

  20. Attractive wireless cash flow yield above plan YTD operating cash flow yield YTD Q2-04 2004E1 EBITDA margin (network revenue) 43.8% 42-43% EBITDA margin(total revenue) 40.5% 39-40% Capex intensity2 9.8% 13% Cash flow yield3 30.7% 26-27% 1Based on current public guidance 2 Capex as % of total revenue 3 EBITDA less capex, as a % of total revenue

  21. Implied cash flow yield of 26 to 27% in 2004 is best in class YTD cash flow yield - North America EBITDA less Capex / Total Revenue 31% 21% 20% 17% 13% 11% 5% (1)% (38)% Nextel AWE Cingular Rogers Verizon PCS TELUS T-Mob USA Source: Company reports Microcell

  22. what’s new?

  23. Canadians now send more than 50M text messages per month Text messaging • Canadians are sending more than 1.1 million text messages a day, up 100% year over year • By 2006, an estimated one billion messages will be sent worldwide every day

  24. Fastap • TELUS Mobility exclusive • World’s first phone and full keypad

  25. 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

  26. Download delights Disney Hockey

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

  28. North American iDEN Direct Connect

  29. TELUS Mobility is the most profitable wireless carrier in North America Conclusion Attractive industry fundamentals • Canadian wireless penetration accelerating • No restrictions on spectrum holdings • Wireless data market exploding • ARPU up, churn down across industry • Margins in excess of 40% • Free cash flow yields expanding

  30. questions?

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

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