2004 Canadian telecom summit Darren Entwistle member of the TELUS Team

2 …to unleash the power of the Internet to deliver the best solutions to Canadians at home, in the workplace and on the move tracking against strategic imperatives 2000  build national capabilities 2. provide integrated solutions 3. focus on growth markets of data & wireless 4. going to market as one team 5. partner, acquire & divest as necessary 6. invest in internal capabilities 1. build national capabilities …to unleash the power of the Internet to deliver the best solutions to Canadians at home, in the workplace and on the move

 Ont/Quecities 89 2  Co-locations  CustomerPOPs 13,600 0  Fibrelit (km) Next Generation (NGN) Circuit-based  Network TELUS Stentor  Platform Mar 2004Jan 2000 Communications NGN delivers enhanced customer data & IP services and operational cost savings national transformation

 PoPscovered (millions) 3G 1G  Technology / Generation 25 -  Mike (iDEN) (millions) Mar 2004Jan 2000 Mobility  key to driving profitable growth  subscribers have tripled to 3.5 million  operating earnings have quintupled to $884 million national wireless transformation

5 (18) (2) (3) (5) (6) (14) (2) (0.3) 3 TeliaFTDTKPNTELUSMTSTelstraNipponBCE 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 EBITDA 1 % growth rates BTPSSWSprintAliantBLSVZSBCAT&T 2003 global telecom performance

6 (24) (4) (16) (0.1) TELUS FTTeliaDTMTSFONBCEKPNAliantNipponBLSTelstraPCCW Cash Flow (EBITDA 1 -Capex) % growth rates 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 AT&TVZBT Sprint SBC 2003 global telecom performance

(1) (6) (8) (20) (0.4) (1) TELUS FTDTMTSSprintAliantTelstraBCEBTNipponTelia 2004E global telecom performance AT&T BLS SBC PCCW VZ KPN 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 projected EBITDA % growth rates

(3) (6) (9) (10) (28) 0.2 (1) TELUSAliantTeliaFTSprintBCETelstraDTNippon 2004E global telecom performance projected Cash Flow (EBITDA - Capex) % growth rates 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 AT&T BLS SBC PCCW VZ KPN MTS BT

9 PCS BCEVerizonCingularRogersNextel AWETELUSMicrocell TELUS Mobility lifetime customer revenue $3,800 Q1-04 monthly % churn rates wireless customer satisfaction = low disconnects

10 Exceeded CRTC standard 1 Service Indicators Complaints Directory Services Local Service Repair Service Service Provisioning 1 company report on 19 CRTC quality of service indicators and standards for March 2004 TELUS setting new historical records in customer service customer service improvements

11 challenges in the marketplace  timeliness of decisions  market is changing at incredible pace  customers demand benefits of new technologies - like IP - instantly  ability to deliver innovative services tied to timely regulatory decisions  competitors are largely unregulated  turnaround time for decisions must improve

12 challenges in the marketplace  consistent application of policies  TELUS & other ILECs invested in infrastructure based on facilities-based competition policy  subsequent regulatory actions create uncertainty  need to set policy, then stay the course

13 challenges in the marketplace  lost opportunities  delay and indecision have a price  deferral account example:  roughly $800 million nationally  CRTC process could add two more years  Broadband Task Force = $1billion to bridge digital divide  TELUS proposal addresses divide  industry & CRTC must work together to change

14 challenges in the marketplace  disruptive nature of VoIP technology  VoIP more than new way to deliver POTS  decouples service from underlying transport  multiple VoIP flavours challenge traditional regulatory approaches  business challenge – deliver promise of IP  regulatory challenge – treat all competitors equally

15 a transformation strategy key performance indicators focus on essentials compliance and enforcement don’t favour or disadvantage particular competitors adapt to disruptive change

16 a transformation strategy key performance indicators  tariffs 45 days  competitive disputes90 days  one issue proceedings180 days  multi-issue proceedings365 days

17 a transformation strategy focus on essentials  establish strategic regulatory imperatives  set priorities  identify and eliminate what is no longer necessary  re-deploy resources to accomplish mission critical activities

18 a transformation strategy compliance and enforcement  punish the bad apples; don’t constrain the good guys  increased competition = increased pressure to rely on market discipline  everyone incented to comply, if enforcement measures are strong  CRTC needs right compliance tools and authority

19 a transformation strategy don’t favour or disadvantage particular competitors  trend to favour competitors, not competition  undermines sustainable competition  regulatory objective should not be generating regulated margin for our competitors  CLECs don’t need TELUS customers to finance their growth

20 a transformation strategy adapting to disruptive change VoIP regulatory framework  VoIP services don’t fit traditional regulatory boxes  CRTC should use wireless approach … did not regulate providers in nascent marketplace  TELUS should be able to compete in VoIP on equal footing with others

21 a transformation strategy adapting to disruptive change  local market forbearance  time for clarity  what is target market share loss?  consider local telephone service substitutes  competition increasing rapidly; need regulator ready to act

thank you