Telecom Summit

2 Darren Entwistle a member of the TELUS team

3 transformation principles 1.Key performance indicators 2.Focus on essentials 3.Compliance and enforcement 4.Level playing field 5.Adapt to disruptive change

4 principle #1: key performance indicators raising the bar on performance  Set clear, consistent strategy  Know where you want to go  Have courage to set targets publicly  Accountability to stakeholders What gets measured, gets done

5 raising the bar on performance - TELUS  Over the last 5 years TELUS set 28 targets  24 of 28 targets met  Rigorous focus on metrics  Instill stakeholder confidence What gets measured, gets done principle #1: key performance indicators

6 raising the bar on performance - CRTC  Implementation of performance standards  10 business days to respond to tariff applications  Major proceedings decision dates set out upfront Setting public targets principle #1: key performance indicators

7 raising the bar on performance - CRTC  Reduced number and frequency of reports  30% reduction in regulatory burden  Decision backlog largely cleared  Deferral account requires attention Reducing regulatory burden X principle #1: key performance indicators

8 bridging the digital divide in B.C.  Worthy use of deferral account  TELUS – B.C. Government partnership  TELUS investing $400 million  All 366 communities in B.C.connected by 2006 Unleashing the power of the Internet principle #1: key performance indicators

9 execute forward-looking strategy  Resist planning through the rear view mirror  TELUS strategy set in future-oriented  Relentless focus on strategic imperatives  Many others in 2000 focused on the present  TELUS outperformed our peers by 124% principle #2: focus on essentials Performance leads to results

10 $5.7B strategic focus on data and wireless 2000 principle #2: focus on essentials 49% 18% 10% LD Wireless Voice 23% Data

11 $5.7B strategic focus on data and wireless 2005 $7.8B Voice Wireless Data 31% 38% 19% % LD Significant exposure to data and 57% 49% 18% 10% LD Wireless Voice 23% Data principle #2: focus on essentials

12 the marketplace has changed dramatically  ILECs compete head-to-head  Cable has entered residential market  Rogers to acquire Call-Net Realistic assessment of market essential principle #2: focus on essentials

13 cable companies are large and established  Multi-billion dollar conglomerates with scale  Diversified product mix  Sophisticated sales and marketing - known brands  Established service delivery model Regulatory head start not required principle #2: focus on essentials

14 disruptive changes since price cap decision  VoIP well-established  Wireless substitution Marketplace is fundamentally different principle #2: focus on essentials

15 light-handed regulation works  Market forces are regulator of choice  CRTC process on local forbearance is welcome  Set ground rules - leave the field - strong referee  Wireless de-regulatory model has worked principle #3: compliance and enforcement Reliance on market forces

16 setting rules and enforcing rules  VoIP decision shows lack of trust in industry players  Focus on compliance and enforcement  Set ground rules for all players  Back up the rules with strong enforcement Giving CRTC the confidence to let go principle #3: compliance and enforcement

17 support facilities-based competition  Set policy and stay the course  No fundamental mid-stream changes to policy  Competitor digital network and price floor decisions are encouraging principle #4: level playing field Consistency is what matters

18 undermining facilities-based competition  Vonage, Primus compete unregulated in Canada  Canadian telephone companies are price regulated  Favours those who do not invest in infrastructure  Disadvantages facilities-based telephone competitors VoIP decision favours foreign competitors principle #4: level playing field

19 CRTC VoIP decision flawed  Decision did not create level playing field  Decision disadvantages Canadian Telcos  Fails to adapt to disruptive technology  Restricts consumer choice principle #5: adapt to disruptive change Regulate for the future

20 Internet-based VoIP is different  Local calling from anywhere  Voice mail via lap top  Broadband access without investing in facilities  Low cost entry for VoIP providers  Shaw invests less than $100 million Not about simple telephony anymore principle #5: adapt to disruptive change

21 Telcos to appeal CRTC decision  Price regulation not required to protect user interests  Canada is unique in regulating retail rates  Regulatory head start for competitors unacceptable Regulatory paradigm shift is needed principle #5: adapt to disruptive change

thank you

Telecom Summit

24 investing for growth is paying off for shareholders  Building high speed data  Building national platforms  Building a lower cost structure Executing on strategy and creating significant cash flow $1.1B cash Investment phase E $3.4B cash Cash generation phase

25 $0 $20 $40 $60 $80 $100 $ May-0030-Nov-0030-May-0130-Nov-0130-May-0230-Nov-0230-May-0330-Nov-0330-May-0430-Nov-0430-May-05 relative equity price performance TELUS outperforms stock market 5 Assumes $100 invested from May 30, 2000 to May 30, 2005 TELUS $111 MSCI World Telecom Index $45

26 Internet-based VoIP is different  Consumers buy VoIP differently  Two separate purchasing decisions:  VoIP application selected from multiple competitors  Internet access selected from competing suppliers Consumers buy VoIP differently principle #5: adapt to disruptive change

27 Shaw + Rogers = Established Competitors ShawRogers Cable TV has high market penetration ShawRogers Homes passedBasic service customers 2.8M 3.3M 2.1M 2.2M principle #2: focus on essentials

28 Leaders in high-speed penetration Shaw + Rogers = Established Competitors ShawRogersShawRogers 870, , M 988,000 Digital cable customersHigh-speed Internet principle #2: focus on essentials

29 wireless success story  15+ million customers, 47% market penetration  $1 billion invested annually in infrastructure  Innovation – push to talk, mobile data access  Emergency 911 services roll out principle #3: compliance and enforcement

30 TELUS capital investments  2000 – 2004 : $8.3 billion of cash invested  High-speed data infrastructure in the west  National wireline and wireless platforms  Building a lower-cost structure for the future  2004 capital investment  $1 billion wireline, $750 million high-speed internet  $355 million wireless Making the investment in infrastructure principle #4: level playing field

31 our competitors have changed  MTS-Allstream merger  Eastlink transforms into triple-play provider  Videotron and Shaw now offer telephone service Evolving competitive landscape principle #2: focus on essentials

32 wireless success story  Reciprocal roaming arrangements  Inter-carrier support for text messaging  Multimedia messaging and high speed wi-fi imminent  Number portability on the way Market forces feed innovation principle #3: compliance and enforcement