TELUS National Evolution
A perspective on 10 years of fundamental change
November 2009
TELUS evolution agenda
Strategic imperatives progress






Focusing on growth markets of data and wireless
Building national capabilities
Providing integrated solutions
Partnering, acquiring and divesting as necessary
Going to market as one team
Investing in internal capabilities
Financial and Valuation Review
Slide
5
15
26
31
33
36
46
Consistent and proven strategy 2000 → 2009
2
TELUS evolution 2000 → 2009
20001
20092
% change
Revenue
$6.0B
$9.6B
 60%
EBITDA
$2.4B
$3.6B
 50%
$681M
$1.1B
 62%
Net income / employee3
$29K
$42K
 45%
Earnings per share
$2.86
$3.56
 24%
Total connections
6.0M
11.9M
 98%
Wireless subscribers
1.1M
6.4M
 482%
Network Access Lines
4.5M
4.1M

26K
1.1M
 4131%
Enterprise value
$10.5B
$17.9B
 70%
Cash returned to shareholders4
$336M
$602M
 79%
Net income
High Speed Internet subscribers
9%
1Revenue,
EBITDA, net income and EPS are 12-months trailing from June 30, 2000. Subscribers and enterprise value as at Jan. 1, 2000
2Revenue,
EBITDA, net income and EPS are 12-months trailing from Sept. 30, 2009. Subscribers and enterprise value as at Sept. 30, 2009
3Excluding
TELUS International
4Using
dividends declared and normal course issuer bid share purchases
3
Focusing on growth markets of
data and wireless
strategic focus on data and wireless
$9.6B
Revenue
$6.0B
Wireline LD
23%
Wireline Local
49%
Wireless
40%
Wireline
LD
Wireless
18%
Data
10%
7%
28%
Wireline
Local
22%
20001
1 12
Wireline
Data
22%
Wireless
Data
9%
71%
20091
months ending June 30, 2000 and Sept 30, 2009, respectively
TELUS revenues increased 61% since 2000
5
TELUS total customer connections
11.9
(millions)
Voice - Network Access Lines
Data - Internet and TV
Wireless
6.0
65%
Internet, TV
and wireless
24%
2000
Q3 2009
98% increase in client connections since 2000
6
investing in our growth strategy
Return phase
$6.9B
Cumulative
consolidated
free cash flow
 Building high speed data infrastructure
 Building national fixed and mobile platforms
 Building lower cost structure
2001 - 2002
2003 - 2009
(to Sept 30, 2009)
$(1.5)B
Investment phase
Long-term strategy generating significant cash
7
review of operations – wireless
driving high-speed internet growth
High Speed Internet customers
1.1M
 Supporting Future Friendly
Home services by ongoing
wireline broadband capital
investments
 Market share has increased
from 11% to 39%
26K
2000
Q3 2009
Fuelling growth and supporting exciting TELUS services
8
TELUS TV evolution
TELUS TV subscribers
137K
0
2000
Q3 2009
Offering TELUS TV – IPTV and Satellite TV
9
TELUS TV evolution
Top 48 Communities
Abbotsford
Airdrie
Beaumont
Belcarra
Burnaby
Calgary
Campbell River
Chilliwack
Cochrane
Coquitlam
Delta
Devon
Edmonton
Fort Langley
Fort McMurray
Ft Saskatchewan
Grande Prairie
Kamloops
Kelowna
Langley
Leduc
Lethbridge
Maple Ridge
Medicine Hat
Mission
Morinville
Nanaimo
New Westminster
North Vancouver
Okotoks
Penticton
Pitt Meadows
Port Coquitlam
Port Moody
Prince George
Red Deer
Richmond
Sherwood Park
Spruce Grove
St Albert
Stony Plain
Strathmore
Surrey
Vancouver
Vernon
Victoria
West Vancouver
Whistler

STV Coverage
Tier 1 IPTV Markets
Bedroom Communities
Tier 2 IPTV Markets
* Nov/Dec TTV Launches
Moving to provide IPTV coverage in 48 top communities
TV coverage footprint in BC and Alberta
has increased from 0 in 2000 to > 90% today
10
continuing wireless growth
Wireless subscribers
6.4M
1.1M
2000
Q3 2009
Apple iPhone 3GS
Generating stellar growth through
successful acquisition and execution
11
building TELUS’ wireless distribution
2009 exclusive points of distribution
2000 exclusive points of distribution
Newfoundland
British
Columbia
230
265
Québec
Alberta
243
245
13
0
Manitoba
11
0
Saskatchewan
17
0
Ontario
368
30
201
0
3
0
P.E.I.
20
New 0
Brunswick
Nova
Scotia
30
0
 Wireless distribution augmented by Koodo launch and acquisition of Black’s
National exclusive distribution outlets doubled to 1,136
12
strengthening wireless distribution
 2008 launch expanding mall distribution
 100 Koodo kiosks and growing
 Realising 60% awareness nationally
 80% in core demographic
 Earning industry recognition from J.D. Power and Associates:
“Highest in customer satisfaction with postpaid wireless service”
 In 2009, acquired 113 retail stores across Canada
 Most in premium mall locations
 72% are Ontario based
Providing flexibility to serve various customer needs
13
Building national capabilities
TELUS wireless coverage in 2000
15
TELUS wireless coverage today
16
TELUS vs Rogers - HSPA east coverage
TELUS HSPA+ coverage
TELUS HSPA coverage
*Completing rollout of HSPA+ in 2010
* Based on Rogers’ Sept. 14, 2009 public announcement of HSPA+ coverage within the cities indicated (using associated census metropolitan areas).
** Based on coverage maps made publicly available by Rogers on Oct. 23, 2009.
Coverage areas are approximate as of October 2009. Actual coverage and network service can vary and are subject to change.
17
TELUS vs Rogers - HSPA west coverage
TELUS HSPA+ coverage
* Based on Rogers’ Sept. 14, 2009 public announcement of HSPA+ coverage within the cities indicated (using associated census metropolitan areas).
** Based on coverage maps made publicly available by Rogers on Oct. 23, 2009.
Coverage areas are approximate as of October 2009. Actual coverage and network service can vary and are subject to change
18
TELUS backbone optical and IP network in 2000
19
TELUS backbone optical and IP network today
Doing business in 87 cities on IP networks
outside Alberta and B.C.
20
TELUS – national infrastructure evolution
Jan 2000
2009
 PoPs covered (millions)
7
33
 Mike (iDEN) covered (millions)
-
28
1G
3 / 3.5G
Wireless
 Generation
Wireline
 Ont/Que and other cities
3
87
 Co-locations
2
104
 Customer POPs
5
1747
 Fibre lit (km)
0
> 19,800
Stentor
TELUS
 Platform
 Network
Circuit-based
Next Generation (NGN)
Executing national growth strategy
focused on data and wireless
21
transitioning to non-regulated revenue base
Revenue
$5.8B
$9.6B
regulated
10%
regulated
non-regulated
47%
53%
non-regulated
90%
Pre-1999
2009
Since 2000 TELUS’ non-regulated revenues
have significantly increased to 90%
22
building economies of scale in Central Canada
$1,200M
Revenue
Operating profit
Cash flow
$260M
$4M
$0
($50M)
($200M)
20001
1 12
2008
months ending Jan 1, 2000
Focused on managed data network services
23
TELUS’ growth in Central Canada
2000
Latest
2008
Central Canada
 Revenue
 $4 million
 $1.2 billion
 EBITDA
 $0
 $260 million
 Cash flow
 $(200) million
 $(50) million
Business market approach Fragmented
Focused on data and managed
applications in five industry verticals
 Energy, public sector,
health care, financial services, and
telecom (doing business as Partner
Solutions)
Central Canada success
Limited
Track record of large wins and
successful contract implementations
Examples:
 TD Bank Financial Group
 Government of Ontario
 Ville de Montréal
 Government of Canada
 Yellow Pages
 Government of Québec
24
Providing integrated solutions
TELUS’ growth in enterprise segment
2000
Virtually unknown in
large corporate
market outside
Western Canada
Leverage investment in
national
Next Generation Network
Opportunity
 Customer
dissatisfaction
with incumbents
 Potential
IP platform to
drive strategic solutions
 Need
to convert to IP
platform
 Support
western base
 Leverage
IP technology
Challenge
 Customer
 Few
Excellent
reputation for
innovation, transition
and operations of
large client deals
Outcome
risk
 Top
fears
 Cumulative
aversion
 Migration
2009
reference clients
score for client
satisfaction
$2.6B in
contract values won
 Anchor
clients in key
industry verticals
 Non-contract
growth
 Low
churn and high
renewal rates
26
building on large enterprise deals
Investing in and focusing on key industry verticals
 Public sector
 Financial services
 Energy
 Healthcare
 Wholesale
National
Defence
Implementation track record leading to contract wins
27
major contract wins across Canada







Québec Government – $900 million over 10 years
Department of National Defence – $200 million over 5 years
TD Bank – $180 million contract over 5 years
Government of Ontario – $140 million contract over 5 years
Yellow Pages Group – $90 million over long term
Ville de Montréal – $87 million over 10 years
Government of B.C. - $245 million over 4 years
Excellent progress in Central Canadian business market
28
enhancing our leadership position in healthcare







TELUS #1 Healthcare IT Company in Canada by Branham Group
2008 Canadian Health IT Company of the Year (ITAC Health)
Emergis purchased January 2008
Electronic Health Records for 5 million Canadians
4.1M Emergis Assure drug cards covering 8.5 million Canadians
3,000+ pharmacies using our pharmacy management software
Exclusive partner to host and operate Microsoft HealthVault in Canada
Leading the evolution of healthcare delivery in Canada
29
Partnering, acquiring and divesting
as necessary
strategic journey 2000 → 2009
Divestiture of
non-core
real estate,
directory and
equipment
leasing
($1.2B)
Acquired
Clearnet
($6.6B) &
QuébecTel
($700M)
2000
2001
Purchase of
PSINet’s
Canadian
operations
plus 6 other
acquisitions
2002
Roaming /
resale
agreements
with Bell
Mobility
Verizon
divested
20.5%
($2.2B)
equity
interest
2003
Acquisition
of Ambergris
Solutions
(international
call centers)
2004
Launched
unsuccessful
bid for
Microcell
2005
Discussions
to acquire
BCE / not
pursued
2006
Accenture
partnership
2007
Acquisition
of Emergis
($743M)
HSPA
network
build partnership
with Bell
Canada
2008
Acquisition
of Black’s
($28M)
2009
Satellite TV
launch agreement
with Bell
Canada
Agreement
to carry
Apple
iPhone
Acquisitions and partnerships furthering TELUS’ strategy
31
Going to market as one team
transformation to a single strong brand
Nature based brand helps make technology simple
33
brand recognition
 One of Canada’s top brands
 Canadian Best Brands - 2009
 One of Canada’s Most Valuable Brands – 2009
 Valued at $1.5 billion
 10 years of Brand Excellence
 Gold Award for Sustained Success
 #1 brand in advertising and brand awareness – 2003
“One of most recognizable and best loved
brands in Canada”
34
Investing in internal capabilities
investing in operational efficiency
$M
Restructuring
costs
2002
570
2003
28
2004
53
2005
54
2006
68
2007
20
2008
59
2009E*
160
Total
Cumulative Cumulative annual
Restructuring EBITDA savings
costs
$1.1B
$1.0B
1,012
2002-2009E*
2002-2009E*
* See forward looking statement caution
Efficiency initiatives result in ~11K position net reductions
EBITDA savings help offset near term dilution of strategic initiatives
36
TELUS – transforming our culture
2000
2000
Seniority-based wage leader
limited pay for performance
Multiple plans
Non-competitive
Most restrictive in
North America
Flexibility threatened
Overtime voluntary, union scheduling
& seniority job posting
Administrative processes not
aligned, contract terms foster
adversarialism
2009
2009
COMPENSATION
BENEFITS
HOURS OF WORK /
PAID TIME OFF
CONTRACTING OUT
EASTERN OPERATIONS /
MOBILITY
Performance-based, competitive
with universal variable pay
Harmonized plans
Competitive/service driven
Restrictions eliminated
Flexibility preserved
OPERATIONAL
ISSUES
Management schedules work &
overtime, best qualified job posting
ADMINISTRATION &
UNION-MGMT RELATIONS
Harmonized procedures, practices
& systems. Contract terms promote
business-focused problem solving
TELUS – transforming our culture
2000
Workplace  Traditional
cultures
culture
Recent
 Global leadership in learning
2008 SkillSoft industry achievement award
 Global leadership in recognition
2009 RPI best practice award for Bravo program
 Global leadership in communication
2009 Stevie awards for teamVision program
 National leadership in HR
2009 Best Diversity Employers
2008 Canada’s Human Capital Leaders
38
TELUS – transforming our culture
2000
Training and  Traditional
development  No
benchmarking
Recent
 Web enabled
 2009, 2007, 2005, 2004, 2003 ASTD BEST
awards
 Rankings #7, #6, #3 worldwide
Named one of Canada’s 10 Most Admired
Corporate Cultures for 2009
Practises
 Multiple
systems,
practices and
cultures
 More unified systems, practices and cultures
 e.g. Amdocs billing systems consolidations
(wireline and wireless)
 Consistent 4 team values drive decisions
and actions
39
TELUS approach to Corporate Social Responsibility
CSR
 Economic
 Social
 Environmental
Corporate Governance
 Ethical conduct
 Internal controls and financial reporting
 Independent and effective Board  External and internal assurance
 Accountability to shareholders
 Reasonable executive compensation
Strong corporate governance provides necessary
foundation for CSR leadership
40
becoming a leading corporate citizen
For our economy
•
•
•
•
•
Sustainable revenue
generation and ROI
Robust internal financial
controls and disclosure
mechanisms
Investment in technology
research and development
Contribution to corporate tax
base
Contribution to sustainable
National economic growth
For our environment
For our society
Communities and customers
• Investment through TELUS
Community Boards
• Strategic partnerships
• Philanthropy & volunteerism
• Social impacts of our
products and services
• Customer satisfaction
Team members
• Recruitment, retention, and
development
• Engagement and diversity
• Labour relations
• Health and safety
•
•
•
•
•
Impact of TELUS operations
Product life-cycle
responsibility
Influence in supply chain
Help customers minimize
their impacts
Complete climate change
strategy
TELUS must incorporate CSR into key business decisions
41
TELUS and Corporate Social Responsibility (CSR)
2000
 Basic reporting
 Limited disclosure
2009
 TELUS an internationally
recognized leader in CSR
 Only North American telco on DJSI World
Index for 9 consecutive years
 Only 1 of 11 Canadian companies listed
Transforming TELUS’ CSR strategy
42
investment in our communities
2000
Community
Investment &
Engagement
 Year-round team
volunteerism and
giving programs
 $7.8M donated
2009
 Nine Community Boards across Canada
- Local and TELUS Community Leaders
- $4.1M to be donated in 2009
 Year-round team volunteerism and giving plus
- 2009 TELUS Day of Service: over 9000
participants in over 150 activities
- $7.1M being donated in 2009 through team
donations and TELUS matches
 Corporate philanthropic endeavours
- $43M committed to science centres
- Upopolis social networking for children’s
hospitals
- TELUS Walk to Cure Diabetes
Since 2000 TELUS and team members contributed $137M
to charitable organizations & 2.6 million volunteer hours
43
TELUS – disclosure and governance excellence
2000
Recent
Annual
Report
Disclosure
 Best in Comm.
sector in Canada
 2 years in a row, overall award of
disclosure excellence in Canada
Corporate
Governance
 Good but not
recognized
externally
 Honourable mention for excellence
in corporate governance disclosure
in 2008 (Best in 2007)
Board of
Directors
 16 - regionally
based
 13 - nationally balanced
 63% in AB/BC
 46% in AB/BC
 Annual report ranked 3rd best in world
in 2009 and 2008 (1st in world 2007)
44
Financial and valuation review
TELUS forward looking statements
This slide deck and our answers to questions contain statements about
expected future events and financial and operating results of TELUS that are
forward-looking. By their nature, forward-looking statements require the
Company to make assumptions and are subject to inherent risks and
uncertainties. There is significant risk that the forward-looking statements will
not prove to be accurate. Readers are cautioned not to place undue reliance
on forward-looking statements as a number of factors could cause actual
future results and events to differ materially from that expressed in the
forward-looking statements. Accordingly our comments are subject to the
disclaimer and qualified by the assumptions (including assumptions for 2009
guidance and a preliminary assessment of expected 2010 capital expenditure
levels), qualifications and risk factors (including those associated with the
deployment and operation of the new national high-speed packet access
network and associated introduction of new products, services and systems)
referred to in the Management’s discussion and analysis in the 2008 annual
report, and in the 2009 first, second and third quarter reports. Except as
required by law, TELUS disclaims any intention or obligation to update or
revise forward-looking statements, and reserves the right to change, at any
time at its sole discretion, its current practice of updating annual targets and
guidance.
EBITDA evolution
$3.6B
$2.3B
Wireless
17%
Wireline
83%
2000
12 mo. June
Wireline
45%
Wireless
55%
2009
12 mo. Sept
Executing strategy drives wireless growth,
now 55% of operating profit
47
strategic focus yields strong results
Wireless earnings and cash flow growth
EBITDA ($M)
1,906
1,445
1,144
530
1,925
1,753
EBITDA less capex ($M)
817
2,005
1,326
1,355
1,457
1,150
1,040
790
457
357
70
2001
2002
(288)
2003
2004
2005
2006
2007
2008
2009E*
* See forward looking statement caution
Continued focus on profitable customer growth
48
managing through challenging times
Macroeconomic factors 2000 → 2009
 2000 -Tech bubble burst destroyed over $100B in North American telecom
value
 2001 - Corp governance crisis – increased cost of financing and regulatory
e.g. Sarbanes-Oxley (SOX)
 2007 - Income Trust conversion decision destroyed over $3B in Canadian
telecom shareholder value
 2008/2009 – Credit crisis and global recession impacted ability and cost to
finance operations
Systemic industry trends 2000 → 2009
 Long Distance erosion
 Reduced $480M of high margin revenue since 2001 at TELUS
 Local line erosion due to technology substitution and competition
 Reduced $550M of revenue since 2000 at TELUS
Achieving financial success despite adversity
49
managing through challenging times
Adverse regulatory decisions 2000 → 2009
 Contribution payments & price caps ~$350M negative EBITDA impact to TELUS
 AWS auction proceeds: $4.25 billion
 3 times original expectations for three major wireless companies
 Incumbents paid 40% premium to new entrants
 TELUS paid $882M in 2008
TELUS Specific factor 2000 → 2009
 Labour unrest and work disruptions 2004 to 2005
Achieving financial success despite adversity
50
TELUS capital expenditures
Wireline
Wireless
$2.25 B
Expected 2009
$1.75 B
$1.77 B
$1.69 B
$2.1 B
$1.86 B
$1.62 B
$1.32 B
$1.25 B $1.32 B
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009E*
* See forward looking statement caution
Over $16.8 B invested into core businesses in Canada
51
TELUS – building financial strength
2009*
2000
Net Debt to EBITDA
3.5x
1.9x
 Long-term policy guidelines
 N/A
 1.5x – 2.0x
EBITDA interest coverage ratio
10.7x
9.0x
Return on Equity
10%
15%
Dividend Payout ratio guideline
N/A
45% - 55% of
sustainable earnings
* 12 months trailing Sept. 30. See forward looking statement caution
Long term policies support strong
investment grade credit ratings
52
53
TELUS generating strong free cash flow
Free cash flow after spectrum purchases ($M)
Wireless spectrum purchased ($M)
1,345
1,167
1,443
1,388
1,243
1,336
776
585
144
2001
361
2002
2000
2003
2004
2005
2006
2007
2008
2009E*
(249)
361
(910)
2009 - impacted by increased capex, pension
and restructuring costs, and start of cash taxes
(1,266)
* Midpoint of 2009E free cash flow, including cash pension contribution. See forward looking statement.
53
returning cash to TELUS shareholders
5.5B
NCIB
Dividends
$1.20 B $1.21 B
$1.27 B
$860 M
$600 M
$340 M
$330 M
$330 M
$140 M $170 M
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Total return of $5.1 billion to shareholders
over past 5 years or approx. $16 per share
54
TELUS #1 globally vs. MSCI incumbent peers over 5 years
1
TELUS
22%
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
BCE
Portugal Tel
New Zealand Tel
Swisscom
Singapore Tel
Verizon
Telstra
Hellenic Tel
Telefonica
AT&T
Telecom Italia
Deutsche Telekom
France Telecom
NTT Corp
BT Group PLC
Royal KPN
PCCW
7%
-7%
-12%
-14%
-17%
-22%
-27%
-30%
-33%
-36%
-41%
-75%
-76%
-76%
-78%
-84%
-94%
Total return (including reinvested dividends)
Dec 31, 1999 to Dec 31, 2004
55
TELUS #1 globally vs. MSCI incumbent peers over 6 years
1
TELUS
64%
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
BCE
Singapore Tel
Hellenic Tel
New Zealand Tel
Portugal Tel
Swisscom
Telefonica
AT&T
Telstra
Verizon
Telecom Italia
BT Group PLC
NTT Corp
Deutsche Telekom
France Telecom
Royal KPN
PCCW
8%
-5%
-5%
-6%
-9%
-18%
-34%
-36%
-38%
-39%
-50%
-74%
-76%
-78%
-78%
-80%
-94%
Total return (including reinvested dividends)
Dec 31, 1999 to Dec 31, 2005
56
TELUS #1 globally vs. MSCI incumbent peers over 7 years
1
TELUS
88%
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
BCE
Singapore Tel
Hellenic Tel
Portugal Tel
AT&T
Swisscom
Telefonica
New Zealand Tel
Verizon
Telstra
Telecom Italia
BT Group PLC
Royal KPN
NTT Corp
Deutsche Telekom
France Telecom
PCCW
28%
27%
20%
10%
-2%
-4%
-13%
-14%
-18%
-30%
-50%
-64%
-73%
-75%
-77%
-77%
-94%
Total return (including reinvested dividends)
Dec 31, 1999 to Dec 31, 2006
57
TELUS #1 globally vs. MSCI incumbent peers over 8 years
1
TELUS
79%
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
BCE
Singapore Tel
Hellenic Tel
Portugal Tel
Telefonica
AT&T
Verizon
Swisscom
New Zealand Tel
Telstra
Telecom Italia
BT Group PLC
Royal KPN
France Telecom
Deutsche Telekom
NTT Corp
PCCW
69%
64%
36%
25%
23%
18%
0%
-5%
-14%
-16%
-51%
-65%
-67%
-72%
-74%
-74%
-94%
Total return (including reinvested dividends)
Dec 31, 1999 to Dec 31, 2007
58
TELUS #1 globally vs. MSCI incumbent peers over 9 years
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
TELUS
BCE
Singapore Tel
Telefonica
Portugal Tel
AT&T
Verizon
Swisscom
Telstra
Hellenic Tel
New Zealand Tel
Royal KPN
Telecom Italia
France Telecom
NTT Corp
Deutsche Telekom
BT Group PLC
PCCW
40%
10%
9%
-8%
-8%
-15%
-18%
-23%
-27%
-32%
-50%
-71%
-72%
-75%
-75%
-80%
-81%
-95%
Total return (including reinvested dividends)
Dec 31, 1999 through Dec 31, 2008
59
TELUS #2 globally vs. MSCI incumbent peers over 10 years
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
Singapore Tel
TELUS
Portugal Tel
BCE
Telefonica
Swisscom
AT&T
Verizon
Hellenic Tel
Telstra
New Zealand Tel
Royal KPN
Telecom Italia
France Telecom
NTT Corp
Deutsche Telekom
BT Group PLC
PCCW
42%
36%
21%
21%
12%
-10%
-16%
-23%
-31%
-33%
-38%
-67%
-69%
-75%
-79%
-81%
-82%
-96%
Total return (including reinvested dividends)
Dec 31, 1999 to Sept 30, 2009
60
Investor relations
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ir@telus.com