questions
& answers

Since 2000, TELUS has been a growth-oriented company. In 2006, revenues grew by more than $500 million. This year, we are targeting a similar increase, to approximately $9.2 billion. As a growth company, management is investing to secure the longterm future for our customers and our investors, as we have consistently done over the last six years.

All of the capital spending in 2007 will be directed toward our core business and advancing our national growth strategy, with the aim of maintaining leading growth metrics in the global telecommunications industry.

In wireless, where revenues are expected to increase 12 to 13% in 2007, we plan to invest $550 million in our infrastructure, an increase of $123 million from 2006. This will include continued strategic investments in our high-speed wireless network (EVDO), expansion in additional markets and enhancement of our digital wireless capacity. We will also be upgrading parts of the network to the next generation of CDMA technology, EVDO Rev A. The benefits will be even faster data transfer rates and higher system capacity, as well as improved quality of service for data applications. Whilst higher than in 2006, the $550 million investment represents less than 13% of revenues, consistent with our guidance range and low compared to wireless carriers globally.

We plan to invest $1.2 billion in our wireline infrastructure, similar to 2006. Whilst this is a higher percentage of wireline revenues than many other telcos currently, we believe it is a wise investment for the long term. A major focus of this investment is to increase the speed, capacity and coverage of our broadband network. This includes a three-year initiative to install advanced Internet equipment in more than 7,000 sites and to run fibre-optic cable within 1,500 metres of customers' homes. Bringing fibre closer to customers' homes is expected to provide Internet access speeds of 15 to 30 megabits per second and beyond, enabling TELUS to offer new services including higher-speed Internet and high-definition TELUS TV. This, in turn, allows us to better compete with competitor offerings and advances our strategy of increasing our 40% share of the high-speed Internet market in our Western incumbent region.

Furthermore, we are enjoying continued strong housing growth in Western Canada as the economies of B.C. and Alberta continue to outpace the national average. This requires increased investment in network access infrastructure including fibre to new homes and multiple dwelling units.

Another ongoing initiative is an information technology (IT) investment program focused on consolidating and upgrading multiple order-entry, billing and customer systems. This is expected to greatly improve efficiency and customer service levels, and also provide marketing flexibility to offer integrated services that differentiate TELUS from the competition.

The wireline capital budget for 2007 also entails successbased capital expenditures in Central Canada as we continue to win additional business, such as our five-year contract with the Government of Ontario to provide fully managed network access services. This contract includes building out new infrastructure in the first few years.

Our superior asset mix and relatively low capex intensity on the wireless side, coupled with the strong margins and cash flow we are generating compared to other telcos, provide TELUS with a proven ability to invest in the future whilst increasing the return of capital to our shareholders through dividend increases. Much of our success in the past several years has been based on the large investments we made from 2000 to 2002. Consistent with our national growth strategy, TELUS will continue to invest in capital spending in 2007 for the long-term benefit of our investors, customers and team members.

Darren Entwistle
President and Chief Executive Officer
Member of the TELUS Team