February 12, 2010

Q4 2009 TELUSinvestor conference call

Darren EntwistlePresident & CEO

Robert McFarlaneEVP & Chief Financial Officer

Today's presentation and 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 2010 targets), 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 quarterly 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.

TELUS forward looking statementsTELUS forward looking statements

Wireless and wireline segment review Consolidated financial review Updates

New TELUS TV developments Broadband build update Defined benefit pension assumptions update

2009 summary Questions and answers Appendix

3

AgendaAgenda

($M) Q4-08 Q4-09 Change

Revenue (external) 1,188 1,225 3.1%

Operational expenses 697 794 14%

Restructuring costs 6 3 n.m.

EBITDA 492 435 (12)%

Capex 236 192 (19)%

As expected EBITDA impacted by higher retention costs to support smartphone adoption

As expected EBITDA impacted by higher retention costs to support smartphone adoption

4

Wireless segment – Q4 2009 financial resultsWireless segment – Q4 2009 financial results

19%

Wireless subscribers1

81%

Totalnet additions

6.5 million total

5.3M

1.2M

High quality postpaid net adds reflected 89% of subscriber mix compared to 80% a year agoHigh quality postpaid net adds reflected 89%

of subscriber mix compared to 80% a year ago

Q4-08

148K

5

Wireless subscriber resultsWireless subscriber results

Q4-09

122K

109K119K

Postpaid

Prepaid

1 Opening balances for postpaid and total wireless subscribers for Q4-09 were reduced by 11K to reflect prior period reporting adjustments.

Smartphone subscriber base increased 61% and expected to be a positive factor for future ARPU

Smartphone subscriber base increased 61% and expected to be a positive factor for future ARPU

6

Smartphone mixSmartphone mix

Smartphone subscribers represent 20% of postpaid base compared to 13% a year ago

Post HSPA network & device launch on November 5: More than 40% of gross postpaid loading came from

smartphones More than 100% increase in retention subscriber

upgrades to smartphones

Data

Q4-09

$57.38

Voice$62.16

Q4-08

7

Q4-09Q4-08

% of ARPU

Wireless ARPUWireless ARPU

11.17

ARPU lower due to continued voiceerosion partially offset by data growthARPU lower due to continued voice

erosion partially offset by data growth

50.9944.78

12.60 22%18%

82%78%

Data growth of 20% driven by continued smartphoneadoption and to be enhanced with HSPA smartphonesData growth of 20% driven by continued smartphone

adoption and to be enhanced with HSPA smartphones8

Q4-08

$203M

Wireless data revenue Wireless data revenue

Q4-09

$243M

$131M

Q4-07BlackBerryBold

Q4-08 Q4-09 Change

Gross adds (000s) 441 431 (2.3)%

Churn 1.62% 1.60% (0.02) pts

COA per gross add ($) 372 380 2.2%

COA expense ($M) 164 163 (0.6)%

Retention expense ($M) 105 133 27%

Increased investments in retention focused on continued smartphone adoption

Increased investments in retention focused on continued smartphone adoption

9

Wireless marketing and retentionWireless marketing and retention

Note: Measurement of costs of acquisition and retention refined in 2009. Prior year comparisons restated.

($M) Q4-08 Q4-09 Change

Revenue (external) 1,266 1,218 (3.8)%

Operational expenses1 824 826 0.2%

Restructuring costs 32 74 n.m.

EBITDA 445 354 (20)%

Capital expenditures 395 322 (18)%

10

EBITDA impacted by higher restructuring and pension costs EBITDA impacted by higher restructuring and pension costs

Wireline segment – Q4 2009 financial resultsWireline segment – Q4 2009 financial results

1 Excluding defined benefit pension expenses from both periods, operating expenses down 3.2%

($M) Q4-08 Q4-09 Change

EBITDA 445 354 (20)%

Defined Benefit pension expense/(recovery)

(23) 6

Restructuring costs 32 74

EBITDA normalized 454 434 (4.4)%

11

Wireline segment – EBITDA normalizedWireline segment – EBITDA normalized

Significant restructuring investment impacted Q4 profitability but expected to lower 2010 cost structure

Significant restructuring investment impacted Q4 profitability but expected to lower 2010 cost structure

1.2 million total

Internet subscribersHigh-speed Internet net additions

Q4-08 Q4-09

1.1M

87K19K

11K

12

High-speed93%

HSIA net adds lower YoYHSIA net adds lower YoY

Internet subscribersInternet subscribers

TELUS TV net additions1

Q4-08 Q4-09

15K

33K

13

TTV continues to show strong results with net adds up 120% and total subscriber base up 118%

TTV continues to show strong results with net adds up 120% and total subscriber base up 118%

TELUS TV subscribersTELUS TV subscribers

Q4-08 Q4-09

78K

170K

TELUS TV subscribers1

1 Includes both TELUS IP TV and TELUS Satellite TV subscribers

14

In Q4/09 TELUS TV and Internet loading exceeded residential NAL losses

In Q4/09 TELUS TV and Internet loading exceeded residential NAL losses

Stabilized residential NAL lossesStabilized residential NAL losses

Q3-09

-41K-41K-41K

Q2-09Q1-09Q4-08

-42K

Q4-09

-41K

44K

31K20K

34K34K

TELUS TV & high-speed Internet

Residential NAL’s

15

Building the future of TELUS TVBuilding the future of TELUS TV

15

Microsoft Mediaroom launched Feb. 2 across various B.C. and Alberta communities

PVR Anywhere – record and watch on any connected TV

Multiple TV’s in a home with multiple HD streams

Superior picture quality

Enhanced channel guide with picture in picture display

Instantaneous channel changing

Faster Internet speeds

Introducing innovative new features that differentiates against cable-TV

Introducing innovative new features that differentiates against cable-TV

16

Broadband build updateBroadband build update

16

Continued ramp-up in broadband coverageContinued ramp-up in broadband coverage

Expanded FTTN coverage to > 75% of households in top 48 communities in Western Canada at YE 2009

Greater Vancouver coverage increased to >70% in Q4

Expect coverage of up to 90% of households in top 48 communities in Western Canada by YE 2010

Cost effective upgrade to VDSL2 technology underway

Provides data download speeds of up to 30 Mbps

Enables expanded IPTV coverage and features

Continuing FTTH to new developments and FTTB to MDU’s

($M excluding EPS) Q4-08 Q4-09 Change

Revenue 2,454 2,443 (0.4)%

Operating expenses 1,479 1,577 6.6%

Restructuring costs 38 77 n.m.

EBITDA 937 789 (16)%

EPS 0.90 0.49 (46)%

Capital Expenditures 631 514 (19)%

Consolidated results in-line with most recent guidanceConsolidated results in-line with most recent guidance

17

Consolidated – Q4 2009 financial resultsConsolidated – Q4 2009 financial results

($M) Q4-08 Q4-09 Change

EBITDA 937 789 (16)%

DB pension expense/(recovery) (25) 5

Restructuring costs 38 77

EBITDA (normalized) 950 871 (8.3)%

18

Consolidated – EBITDA normalizedConsolidated – EBITDA normalized

Normalized EBITDA impacted by lower legacyvoice revenues and increased wireless retention costs

Normalized EBITDA impacted by lower legacyvoice revenues and increased wireless retention costs

Investing in operational efficiencyInvesting in operational efficiency

Increased restructuring costs reflect an accelerated emphasis on operational efficiency initiatives

Increased restructuring costs reflect an accelerated emphasis on operational efficiency initiatives

19

Total restructuring costs ($M)

2008 2009

190

59

* See forward looking statement caution

2010E*

75

2007

20

Improving overall efficiency and cost competitivenessImproving overall efficiency and cost competitiveness

  YE 2008 YE 2009 Change

Total (domestic)1 27,900 25,750 (2,150)

TELUS International 7,950 8,700 750

Black’s Photography 850 850

Total 35,850 35,300 (550)

Breakdown of full time equivalent employeesBreakdown of full time equivalent employees

20

1 Total (domestic) excludes 850 FTE’s from the Black’s Photography acquisition.

Quarterly domestic FTE reductionsQuarterly domestic FTE reductions

Q1-09

500

Q2-09

400

700550

Q3-09 Q4-09

Approx.1,000

2010E*

2,150 domestic FTE reduction in 2009Targeting approx. 1,000 reduction in 2010

2,150 domestic FTE reduction in 2009Targeting approx. 1,000 reduction in 2010

* See forward looking statement caution 21

2009

2,150

($M) 2008 2009 Change

Salaries, benefits* & employee-related expenses

1,944 1,792 (7.8)%

Other operating expenses 1,474 1,485 0.7%

Subtotal opex 3,418 3,277 (4.1)%

DB pension expense (91) 20

Restructuring costs 51 178

Total operating expenses 3,378 3,475 2.9%

22

Wireline segment – annual operating expensesWireline segment – annual operating expenses

Employee-related expenses down 8%Employee-related expenses down 8%

* Excluding defined benefit pension plans

EPS continuity ($)EPS continuity ($)

(0.18)

(0.09) (0.06) (0.01) 0.24

Excl. Tax Adj.

0.90

0.49

0.80Excl. Tax

Adj.

1 Normalized EBITDA excludes restructuring and pension costs.

Per guidance, EPS impacted by debt redemption, restructuring and pension costs

Per guidance, EPS impacted by debt redemption, restructuring and pension costs

Q4/08 reported

Q4/09 reported

2009 debt redemption

Normalized EBITDA1

Restr.costs

Pension costs

Dep & Amort. and other

23

Tax Adj.

0.25Tax Adj.

TELUS refinancing update TELUS refinancing update

In December, successfully issued $1B senior unsecured notes 5.05% 10 year notes, maturing December 2019

Proceeds used to fund partial redemption of notes due in June 2011 Redeemed US$577M (Cdn$607M) of 8% US$1.925B notes Paid $315M to terminate associated cross-currency interest

rate swaps As expected, recorded pre-tax charge of $99M for early partial

redemption and associated swaps After-tax impact of $69M or 22 cents per share

Completed successful $1B debt issue in DecemberCompleted successful $1B debt issue in December

24

Defined Benefit pension assumptions updateDefined Benefit pension assumptions update

25

2009 2010E*

Discount rate 7.25% 5.85%

Long-term expected return 7.25% No change

Pension expense ($M) $18 $28

Pension funding ($M) $179 $143

99% fully funded99% fully funded

* See forward looking statement caution

SummarySummary

Invested strategically in 2009 for enhanced competitiveness and future growth Launched 3G+ wireless network Expanded wireline broadband reach Improved organizational cost efficiency through accelerating OEP

initiatives to address J-curve dilution and recessionary impacts Benefits from strategic investments in 2010*

Leverage 3G+ wireless network to accelerate data and roaming growth Leverage enhanced broadband network and Mediaroom for TV growth Lower cost structure with estimated EBITDA savings of $135M Targeting $400M reduction in capital spending Estimating 50%+ growth in free cash flow due to decrease in capex,

despite peak year of cash taxes

26

Expect significant FCF growth in 2010Expect significant FCF growth in 2010

* See forward looking statement caution

Questions?

investor relations 1-800-667-4871telus.com ir@telus.com

Appendix Free cash flow – Q4 and 2010E 2010 targets 2010 corporate priorities Definitions

2009Q4

2008Q4C$ millions

Appendix – Q4 free cash flowAppendix – Q4 free cash flow

EBITDA 937 789

Capex (631) (514)

Net Employee Defined Benefit Plans Expense (Recovery) (27) 8

Employer Contributions to Employee Defined Benefit Plans (26) (45)

Interest expense paid (includes income tax interest income)* (192) (296)

Cash Income Taxes and Other (2) 4

Non-cash portion of share-based compensation 14 7

Restructuring payments (net of expense) 30 51

Donations and securitization fees included in other expense (8) (7)

Free Cash Flow (before share-based compensation payment) 95 (3)

Share Based Compensation Paid (34) (32)

Free Cash Flow (per current public guidance methodology) 61 (35)

Purchase of shares for cancellation (NCIB) (6) -

Dividends (144) (151)

Working Capital and Other (7) 46

Funds Available for debt redemption (96) (140)

A/R Securitization 50 100

Net Issuance (Repayment) of debt 14 47

Increase (Decrease) in cash (32) 7

* Includes debt redemption charge of $99 million. Excluding the impact FCF would increase 4.9% to $64 million.

~(450)

2010E*

Net Cash Interest

$3,500 to 3,700EBITDA

($M)

~(80)Other1:

Free Cash Flow

1 Includes restructuring expense (net of cash payments), share based compensation (net of cash payments) and cash payments related to charitable donations and securitization fees

~(1,700)Capex

865 to 1,065

Net cash tax payment (385) to (425)

Cash pension contribution (in excess of expense) ~(115)

Free Cash Flow (incl. cash pension contribution) 750 to 950

30

Appendix – 2010E free cash flowAppendix – 2010E free cash flow

2009

(513)

$3,491

51

(2,103)

660

(266)

(160)

500

* See forward looking statement caution / Provided December 15, 2009

($B, excl. EPS) 2010 targets* Change

Revenue $9.8 to $10.1 2 to 5%

EBITDA $3.5 to $3.7 0 to 6%

EPS1 $2.90 to $3.30 3 to 17%

Capex Approx $1.7 (19)%

* See forward looking statement caution / Provided December 15, 2009

31

Appendix - 2010 targets*Appendix - 2010 targets*

1 EPS change excludes 55 cents of positive income-tax related adjustments and 22 cents for a loss on early partial redemption of long-term debt in 2009.

Appendix - 2010 TELUS corporate prioritiesAppendix - 2010 TELUS corporate priorities

Capitalize on the full potential of TELUS’ leading wireless and wireline broadband networks

Enhance TELUS’ position in the Small and Medium Business (SMB) market

Deliver on our future friendly brand promise to clients

Continue to improve TELUS’ operational efficiency to effectively compete in the market and fund future growth

Invigorate TELUS Team engagement and continue to drive the philosophy of “Our Customers, Our Business, Our Team, My Responsibility

32

Opportunity to build value fromstrategic investments made in 2009

Opportunity to build value fromstrategic investments made in 2009

EBITDA: earnings, after restructuring and workforce reduction costs, before

interest, taxes, depreciation and amortization

Capital intensity: capex divided by total revenue

Cash flow: EBITDA less capex

Free cash flow: EBITDA, adding Restructuring and workforce reduction costs, net

employee defined benefit plans expense, cash interest received and excess of

share compensation expense over share compensation payments, subtracting

cash interest paid, cash taxes, capital expenditures, cash restructuring payments,

employer contributions to employee defined benefit plans, and cash related to

Other expenses such as charitable donations and securitization fees

Cost of retention (COR): total costs to retain existing subscribers, often presented

as a percentage of network revenue

TELUS definitions for non-GAAP measuresTELUS definitions for non-GAAP measures

Appendix – definitionsAppendix – definitions