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RBC Whistler Conference 2003 The View from the Summit

RBC Whistler Conference 2003 The View from the Summit. Robert McFarlane EVP & Chief Financial Officer February 19, 2003. Forward-Looking Legal Disclaimer.

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RBC Whistler Conference 2003 The View from the Summit

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  1. RBC Whistler Conference 2003The View from the Summit Robert McFarlane EVP & Chief Financial Officer February 19, 2003

  2. Forward-Looking Legal Disclaimer This presentation contains 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’ 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. All dollars in C$ unless otherwise specified.

  3. Agenda • Q4 Review • 2002 Review • 2003 Outlook

  4. About TELUS Mobility Leading national wireless provider

  5. Q4 Review Slide 5

  6. Q4 Review – Mobility Flat YoY expenses on strong network revenue growth & reduced capex drove tremendous cash flow improvement 1 Ratio of capex to total revenues

  7. Q4 Review – Mobility ~20% ARPU premium to competitors maintained Material improvement in churn rate

  8. Q4 Review – ARPU Q4 ARPU flat year-over-year $56 $56 Q4-02 Q4-01 Average Revenue Per Unit ($/month)

  9. Q4 Review – Churn Q4 monthly churn rate improved 41 pts YoY 2.09% 1.68% Q4-01 Q4-02 Monthly churn rate (%)

  10. 2002 Review

  11. 2002 ReviewPerformance vs. Targets Significantly exceeded 2002 targets

  12. 2002 ReviewEBITDA & Margin Outstanding 2002 EBITDA growth of 50% contributing to material YoY margin expansions $535M EBITDA Margin 26% $356M 20% $173M 11% 2000 2001 2002 Wireless EBITDA ($)

  13. 2002 ReviewCapital Expenditures Significant capital intensity improvement $644M1 Capex intensity $460M 35% 23% 2001 2002 Capital Expenditures ($M) 1 Excludes $356M for spectrum acquisition in 2001

  14. 2002 ReviewCapital Intensity Superior capital intensity compared to US average 27% 25% 23% U.S. Average Canadian Average1 TELUS Mobility Capital Intensity (%) - 2002 • Source: Company & analyst reports

  15. 2002 ReviewEBITDA-Capex • Positive cash flow of $75M in 2002 $719M YoY improvement $75M 2001 2002 ($644M) EBITDA-Capex ($M)

  16. 2002 ReviewPerformance vs. Targets

  17. 2002 ReviewNet Additions Net additions flat YoY despite decline in industry net additions 418K 418K 2001 2002 Net Additions

  18. 2002 Review Net Additions Although flat YoY, 2002 net additions of 418K represent increased share of industry net additions 2001 2002 TELUS Mobility22% TELUS Mobility~30% 1.3M 1.9M • Source: Company & analyst reports

  19. 2002 Review Subscriber Mix TELUS Mobility has industry leading postpaid mix Prepaid 17% Postpaid 83% 3.0M Subscribers

  20. 1 Microcell ARPU 9 mo. YTD Source: Company reports & analyst reports $55 $46 $45 $401 Microcell TELUS Mobility BCE Wireless Rogers AT&T 2002 ReviewARPU YTD ARPU industry leading with ~20% premium to closest competitor Average Revenue Per Unit ($/month) - 2002

  21. 2002 ReviewChurn North American industry leading monthly churn rate in Q4-02 2.8% 2.3% 1.8% U.S. Average Canadian Average1 TELUS Mobility Monthly Churn (%) - 2002 • Source: Company & analyst reports • 1 Microcell churn estimated

  22. Other Accomplishments in 2002 • Completed integration (incl. Billing systems) • Implementation of roaming agreements • Improved network quality • Significantly increased distribution • Cross Carrier SMS in Canada • Verizon - preferred Canadian roaming partner

  23. 2002 Review How far we have come in 2 years Subscriber base up 39% Industry-leading value per subscriber has increased

  24. 2002 Review How far we have come in 2 years Tripling of EBITDA and capex reduction drove a $435M improvement in annual cash flow 1 Ratio of capex to total revenues

  25. 2003 Outlook

  26. 1,027% 682% 137% Introduction April 2002 June 2002 Sept 2002 Jan 2003 What’s coming - SMS continues to explode TELUS Mobility SMS usage increasing exponentially

  27. What’s coming - Cool new phones

  28. What’s coming - Cool phones take pictures

  29. What’s coming - Cool pocket PC phone

  30. What’s coming - Cool new RIM Blackberry

  31. What’s coming - Mike goes national

  32. 2003 Targets 2003 targets reflect continued relentless focus on profitable subscriber growth

  33. How does TELUS Mobility measure up? Mobility’s 2003 key indicators superior to industry benchmarks Sources: TELUS estimates. Cdn. Statistics - Company Reports; US Statistics - Company Reports and Morgan Stanley 1 Projected capex as a % of forecast total revenue. 2 Projected EBITDA less projected Capex divided by projected total revenues 3 Projected wireless penetration gain divided by # of carriers in market. For TELUS, projected net adds divided by projected covered POPs

  34. Summary • Met/exceeded 2002 financial targets • Industry leader - ARPU & churn • Value creation focused on leading EBITDA growth • Capital discipline driving enhanced efficiency • Free cash flow positive • Proven management team • Cash generation superior to North American peers TELUS Mobility is a premium wireless asset with superior operating metrics

  35. Questions? Answers! Slide 35

  36. Investor Relations 1-800-667-4871 www.telus.com ir@telus.com

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