June 1, 2001

TELUS signs letter of intent to acquire Canadian operations of Internet services and network provider, PSINet

Burnaby, B.C. - TELUS and Virginia-based PSINet Inc. have signed a letter of intent (LOI) pursuant to which TELUS has offered to purchase PSINets Canadian operations and facilities. The LOI was signed concurrently with PSINet Inc.'s announcement of filing for bankruptcy protection.

In Canada, PSINet has approximately 275 employees and about 50 points-of-presence, or connection facilities. It serves most major markets in the country, including Toronto, Montreal, Ottawa, Edmonton, Calgary and Vancouver. The company provides Internet access, Web hosting, security and e-commerce application services to the Canadian business and ISP markets. PSINet Canada also delivers consumer and small business Internet services through its wholly-owned subsidiary, Calgary-based CADVision.

The company recorded more than $74 million in revenue last year. It has a state-of-the-art Internet data centre in Toronto. PSINet has approximately 8,600 corporate accounts across the country.

"The strong data and IP skills of the PSINet employees and the company's impressive customer base are consistent with TELUS' strategic growth initiatives," said Jim Peters, executive vice-president of TELUS Corporate Development. "TELUS proposes to retain PSINets Canadian-based employees and ensure the service PSINet customers expect, continues."

"The transaction would strengthen TELUS' position as one of the leading Internet hosting providers in Canada by combining PSINet's Internet hosting business and data centre with our existing hosting business and newly constructed, national Internet data centres," Peters added. "If we can acquire PSINet's Canadian operations at a price that is cost effective for us, we will accelerate our plans for national business Internet services."

TELUS' proposed purchase is subject to a number of conditions, including regulatory approval and approval under bankruptcy proceedings, including the Companies Creditors Arrangement Act in Canada. Decisions are expected by the end of July.

TELUS Corporation (TSE: T, T.A; NYSE: TU) is one of Canada's leading telecommunications companies providing a full range of telecommunications products and services that connect Canadians to the world. The company is the leading service provider in Western Canada and provides data, Internet, voice and wireless services to Central and Eastern Canada.

For more information, please contact:
Doug Strachan
Director, external communications
(604) 432-2663 (office)
doug.strachan@telus.com