Canadian telecommunications industry Presented by : Gary Li Vincent Minichiello Amy Ng Dickson Tan

Agenda Industry Analysis Manitoba Telecom Services (TSE:MBT) Telus Corporation (TSE:T) Rogers Communications Inc. (TSE:RCI.B)

What is telecommunication dfttttetttetteltelecommunicatio n Communication over a distance by cable, telegraph, telephone, or broadcasting. -Oxford Dictionary SenderMediumReceiver

Key Terms Average Revenue Per User (ARPU) Total Revenue divided by # of subscribers Compound Annual Growth Rate (CAGR) The year-over-year growth rate of an investment over a specified period of time.

History Smoke signals and drums The first telegraph bySir Charles Wheatstone and Sir William Fothergill Cooke Charles Wheatstone Cooke The first conventional telephone developed by Alexander Bell The first radio station Introduction of the television The ARPANET was developed The first cellphone

Segmentation Internet Access Fixed Line Telecommunications Media Wireless Telecommunications

Internet Market Volume

Internet Number of Internet Subscribers

Internet Competitive Landscape Buyers have low switching costs Strong supplier power Potential entrants attracted to market growth

Internet Forecasted Market Volume

Internet Forecasted Number of Internet Subscribers

Wireless Market Volume

Wireless Number of Wireless Subscribers

Wireless Competitive Landscape National governments are the sole suppliers of bandwidth Large number of buyers Switching costs vary

Wireless Forecasted Market Volume

wireless Forecasted Number of Wireless Subscribers

Wireline Market Volume

Wireline Number of Wireline Subscribers

Wireline Competitive Landscape Slow growth High threat of substitutes Buyer power is limited Low switching costs

Wireline Forecasted Market Volume

Wireline Forecasted Number of Wireline Subscribers

Technology AnalogVariable signal continuous in both time and amplitudeAffected by “noise”, which can cause data loss DigitalUses discrete values represented by binary numbersLess likely to have data loss

Technology Spectrum Licensing Is a radio frequency that is subject to usage limitations Regulated by the government Extremely expensive (up to $1billion)

Technology Code Division Multiple Access (CDMA) Channel access method utilized by various radio communication technologies Global System for Mobile Communications (GSM) Most popular standard for mobile phones in the world. Pioneered SMS

Technology International Mobile Telecommunications-2000 (3G) Allows simultaneous use of speech and data service Higher data rates Enormous costs of additional spectrum liscening High Speed Download Packet Access (HSDPA) Enhanced 3G network Higher data transfer speeds Began selling HSDPA USB modems

Technology 4G LTE - No specific definition yet High network capacity A nominal data rate of 100 Mbit/s High quality of service for next generation multimedia support Involves major changes in hardware 5G - No specific definition yet Introduced in Korea in 2012 Unknown speed and service Claim to be super high-speed

Regulatory Environment Industry Canada Canadian Radio-television and Telecommunications Commission Competition Bureau Industry Canada Responsible for communications policy and spectrum frequency allocation. Responsibility for providing certification and type-approval of telecommunications equipment in Canada. Regulates and supervises broadcasting and telecommunications in Canada. Oversees and enforces decisions relating to the terms, conditions and tariffs associated with the interconnection of facilities among telecommunications carriers and service providers. Acts as a “watchdog” for conspiracies to fix prices and price maintenance. Authority over the approval of mergers. Deal cases involved with misleading advertising and exclusive dealing.

Bringing Your World Together Innovation in Communications, Information and Entertainment

RCi-b 10 year

RCi-b 5 year

RCi-b 1 year

Rogers Agenda HistoryBusiness Segment Rogers Wireless Rogers Cable Rogers MediaManagementPerformanceRecommendation

History E.S. Rogers Sr Ted Rogers was able to pick up a report of a ship wreck in Ireland while using his telegraph set He is the first amateur wireless operator in Canada to send a signal across the ocean The Alternating Current Tube system schematics, hand-drawn by Ted Rogers Sr. for his Patent application CFRB stands as the first all-electric radio station in the world, its transmitters being powered by Rogers A/C Tubes. The call-letters represent Canada's First Rogers Batteryless Rogers Batteryless Radios merged with Majestic Electric Radios, a leading radio manufacturer in Chicago in Ted Rogers Sr. passed away suddenly in The employees at Rogers- Majestic and CFRB were touched deeply by this profound tragedy. HISTORY

History E.S. “Ted” rogers While in law school, Ted Rogers buys CHFI, a struggling FM radio station and builds it into a success CHFI-AM is launched later renamed CFTR, signifying ‘Canada’s First Ted Rogers’, now 680 News Ted Rogers founds Rogers Cable TV, acquires Bramalea Telecable and formally enters into the cable business with 300 subscribers Rogers Community Television premieres Rogers Cable TV launches ‘cable tv converters’ in Toronto, providing its subscribers with more channels Rogers becomes a public company when it acquires Canadian Cablesystems through a reverse takeover and becomes biggest cable company in Canada HISTORY

History E.S. “Ted” rogers Rogers acquires Premier Cablevision of Vancouver Rogers starts to operate in U.S. cable market. Wins franchises in Orange County, California, Minneapolis, and Portland and purchases the cable system in San Antonio Cantel (predecessor of Rogers Wireless) launches cellular service on July Rogers Communications Inc. is formed as the parent company to his operating divisions. Rogers Broadcasting acquires CFMT - Toronto Rogers Video is created and later becomes the largest Canadian-owned chain of rental video stores. Rogers Broadcasting acquires the Canadian Home Shopping Network, later renamed The Shopping Channel Rogers sells U.S. cable assets for over $1 billion profit and invests profits in wireless sector. HISTORY

History E.S. “Ted” rogers Rogers Cablesystems and partners launch Viewer’s Choice Canada, a pay-per- view cable television company Rogers Broadcasting station CFTR changes its format and becomes 680News, the first all- news station in Canada Rogers launches $3.1 billion hostile bid for Maclean Hunter, at the time the largest takeover in Canadian history – Rogers Media is created Rogers pulls out of Unitel. Rogers becomes the first cable company in North America to launch commercial high-speed Internet service when it launches service in Newmarket, Ontario Rogers Cantel AT&T launches prepaid Pay-As-You-Go cellular service Rogers Cablesystems launches Digital Cable Television service – offering more channels and enhanced services to subscribers. Microsoft, AT&T and British Telecom invest in Rogers HISTORY

History E.S. “Ted” rogers Rogers acquires the Toronto Blue Jays major league baseball team Rogers Media acquires control of Sportsnet from CTV. Renamed Rogers Sportsnet Rogers launches GSM wireless network Rogers Cable launches Video On Demand. CFMT-TV rebranded as Omni Television Rogers Cable launches Personal Video Recorders (PVRs) Rogers Communications Inc. acquires the SkyDome stadium in Toronto. Rogers buys back AT&T's interest in Rogers Wireless Rogers Cable acquires Call-Net and offers local telephone service Rogers Cable launches the Rogers Yahoo! Rogers Media launches “Hello!” magazine HISTORY

History E.S. “Ted” rogers Rogers acquires five Citytv television stations Rogers achieves investment grade status for its debt Rogers Wireless launches the Apple iPhone. The Buffalo Bills NFL Football Team, in partnership with Rogers Communications, kick off their “Toronto Series” with a pre-season game at Rogers Centre against the Pittsburgh Steelers. Bills win, 24 to 21. Ted Rogers passes away at his home, from congestive heart failure. Alan Horn becomes Acting CEO of Rogers Communications Inc., as well as retaining Chairman duties Nadir Mohamed becomes President & CEO of Rogers Communications Inc. HISTORY

Business Segments Rogers Communication s Rogers Wireless Rogers CableRogers Media BUSINESS SEGMENTS

Rogers Wireless Canada’s largest wireless provider8.2 M wireless voice & data subs37% national market share at 2Q09Most reliable & fastest networksUnmatched distribution channel with two strong brands in marketFirst national GSM/HSPA carrier brings roaming & device advantage First Canadian carrier to carry the Apple iPhone 3G and 3GS in CanadaBlackBerry Bold and the BlackBerry CurveFirst Google Android-powered devices in Canada.HSPA+ Rocket Stick BUSINESS SEGMENTS

Rogers Wireless Operating Revenue: Post paid (voice and data)Prepaid (voice and data)One way messagingEquipment salesNetwork revenue and Data Revenue Operating Expenses: Cost of equipment salesSales and marketing expensesOperating, general and administrative expenses Profit:

Rogers Cable Canada largest cable television service providerHigh-Speed Internet Digital TVRogers on DemandHome Phone BUSINESS SEGMENTS

Rogers Cable Operating Revenue: Analog cable serviceDigital cable service revenueInternetRogers Home PhoneRBDRogers Retail Operating Expenses: Sales and marketing expensesOperating, general and administrative expensesCost of Rogers Retail sales Profit:

Rogers MEdia Portfolio of category-leading media assets Radio and television broadcastingPublishingSports entertainmentOnline properties BUSINESS SEGMENTS

Rogers Media Operating Revenue: Advertising revenuesCirculation revenuesSubscription revenuesRetail product revenuesSales of ticket, receipts, of league revenue sharing and concession sales associated with Rogers Sports Entertainment Operating Expenses: Cost of salesOperating, general and administrative expenses Profit:

Management MANAGEMENT

Financial Statement

RCi-b 5 year

RCi-b 1 year

Buy

The Future is Friendly

T 10 Year

T 5 Year

T 1 Year

Telus Agenda HistoryList of AssetsStructureWirelessWi redManagementPerforman ceRecommendation

History TELUS Corporation established, following the reorganization of the Alberta Government Telephones Commission, becoming the parent company of AGT. The sale of TELUS shares marked the largest initial public offering in Canadian history up to this time, raising $896 million Edmonton Telephones Corporation (ED TEL) established as an arms-length subsidiary company of the City of Edmonton Consumer Internet service is launched TELUS acquired ED TEL from the City of Edmonton for $467 million The Province of Alberta sold its remaining ownership interest in TELUS for $870 million The TELUS "master brand" introduced, bringing products and companies under one unified identity. The ED TEL and AGT brands are retired. HISTORY

History TELUS Corporation and BC TELECOM announce a proposed merger. This is the first step toward creating a leading national telecommunications company TELUS acquires wireless company Clearnet TELUS integrates its wireline and wireless segments of the business – TELUS Communications and TELUS Mobility – into one operating structure TELUS acquires ADCOM, Inc TELUS acquires Arqana Technologies Inc, Daedalian Solutions Inc, PSINet's Canadian operations and facilities, QuebecTel, Columbus Group, Williams Communication Canada, Northwest Digital (NWD) Systems Inc TELUS acquires Assurent Secure Technologies.TELU S completes the restructuring of TELUS Communications and TELUS Mobility TELUS completes acquisition of Emergis. HISTORY

Business Segments Telus Telus Wireless Telus Wireline BUSINESS SEGMENTS

BUSINESS SEGMENTS

Telus Wireless BUSINESS SEGMENTS

Telus Wireless BUSINESS SEGMENTS

Telus Wireless Risks BUSINESS SEGMENTS

Telus Wireline BUSINESS SEGMENTS

Telus Wireline Risks BUSINESS SEGMENTS

Management How Telus is Organized: MANAGEMENT

Management MANAGEMENT

Management MANAGEMENT

Financial Statements

FOCUSED, RESPONSIVE & LEAN “To deliver true value as seen through the eyes of our customers”

MBT 10 year

MBT 5 year

MBT 1 year

MTS Agenda HistoryBusiness SegmentsManagementPerformanceRecommendation

History HISTORY Became a public traded company on the TSX Formed Strategic alliance with Bell Ended strategic alliance with Bell in Western Canada Acquired Allstream and become the 3 rd largest telecom provider in Canada Initiated broadband service in Manitoba Acquired Allstream and become the 3 rd largest telecom provider in Canada

History HISTORY 2004 –Became strategic alliance with BT: broaden IP based technology service 2006 – Spent $320 million share repurchase Pierre Blouin became CEO (Former BCE executive) Acquired Delphi Solutions Corp Manitoba’s Top Employers by Winnipeg Free Press Introduced high definition TV service