Q1 2012 TELUS investor conference callMay 9, 2012

Robert McFarlaneEVP & Chief Financial Officer

Joe NataleEVP & Chief Commercial Officer

Darren EntwistlePresident & Chief Executive Officer

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TELUS Forward Looking Statement

Today's presentation and answers to questions contain statements about expected future events and financial and operating performance of TELUS that are forward-looking. By their nature, forward-looking statements require the Company to make assumptions and predictions 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 performance 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 2012 annual targets), qualifications and risk factors (including TELUS proposed share consolidation and foreign ownership levels, the ability over time to sustain dividend growth of circa 10% per annum with semi-annual dividend increases to 2013, and CEO three year goals for EPS and free cash flow growth excluding spectrum costs to 2013) referred to in the Management’s discussion and analysis in the 2011 annual report, and in the 2012 first quarter report. 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.

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Agenda

Share conversion proposal update

Wireless and wireline segment review

Consolidated financial review

Updates

Spectrum auction and foreign direct investment policies

Operational highlights

Questions and Answers

Mason Capital

Despite Mason having one twentieth of the economic interest of our employees, they hold four times the voting power

Executive Director of CCGG condemns ‘empty voting’ and fully supports one share – one vote

Leading independent proxy advisors, ISS and Glass Lewis supported the proposal four times

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Share consolidation benefits

Enhances TELUS’ leading good corporate governance practices

Enhances marketability of TELUS shares Enhances liquidity of common shares Listing on New York Stock Exchange

One share – one vote

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Significant share value appreciationsince announcement

Since announcement, TELUS’ market valuehas increased circa $1 billion

Feb. 21 – May 8 Common Shares: 4.0% Non-Voting: 5.9% Toronto Stock Exchange Index: (7.3)% MSCI Global Telecom Index: (0.7)%

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Our commitment to our shareholders

TELUS Board and Management fundamentally agree this is

the right proposal and in the best interest of our company

and long-term shareholders

We will pursue other actions to convert our share structure

to a single class

Conversion on one-to-one basis is the right model

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TELUS continues to build upon our company’soperational and financial momentum

Q1 2012 wireless financial results

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($M) Q1-11 Q1-12 change

Revenue (external) 1,308 1,383 5.7%

EBITDA1 551 622 13%

EBITDA margins2

(total revenue) 41.8% 44.7% 2.9 pts

Capex 76 151 99%

EBITDA less capex 475 471 (0.8)%

1 EBITDA before restructuring costs in Q1-12 and Q1-11 were $626 and $551 million, respectively.2 Margins on network revenue in Q1-12 and Q1-11 were 48.3% and 45.8%, respectively.

Record EBITDA with growth of 13% and margin improvementCash flow strong while continuing LTE investments

Wireless subscriber results

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Wireless subscribers

Postpaidnet adds

7.4M total

1.2Mprepaid

Q1-11

52K63K

Q1-12

Totalnet adds

Q1-11

32K22K

Q1-12

Postpaid net adds growth of 21% y/y Smartphones now 56% of postpaid base, up from 38% in prior year

84%

16%

6.2Mpostpaid

Marketing and retention

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Q1-11 Q1-12 change

Gross adds (000s) 388 363 (6.4)%

Churn1 1.70% 1.55% (0.15) pts

COA per gross add $348 $362 4.0%

COA expense $135M $131M (3.0)%

Retention expense $148M $139M (5.8)%

Lifetime revenue $3,405 $3,798 12%

1 Q1-12 and Q1-11 churn of 1.52% and 1.62% when normalized for loss of Government of Canada contract.

Industry leading churn combined with lower acquisition and retention expenses

Blended ARPU analysis

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Data

Q1-12

$58.87 Voice$57.89

Q1-11

% of ARPU

Q1-12Q1-11

31%

69% 61%

39%22.83

40.18 36.04

ARPU increase of 1.7% led by dataSixth consecutive quarter of ARPU growth

17.71

Wireless data revenue

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Q1-11

$366M

Q1-12

$498M

$254M

Q1-10

Industry leading data revenue growth of 36%Q1 data increased to 39% of network revenue

Q1 2012 wireline financial results

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($M) Q1-11 Q1-12 change

Revenue (external) 1,223 1,248 2.0%

EBITDA1 435 387 (11)%

EBITDA margins(total revenue) 34.4% 30.0% (4.4) pts

Capex 333 290 (13)%

EBITDA less capex 102 97 (4.9)%

1 Q1-12 adjusted EBITDA of $388M excludes a $1M equity loss for residential component of TELUS Garden real estate joint venture and Q1-11 adjusted EBITDA of $419M excludes a $16M non-cash gain on Transactel. 

Wireline revenue growth reflects strong TV and HSIA subscriber growthCash flow stable as lower EBITDA offset by reduced capex

Adjusted wireline EBITDA

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($M) Q1-11 Q1-12 change

EBITDA 435 387 (11)%

Gain on Transactel acquisition (16)

Equity loss for residential component real estate J.V.  1

Adjusted EBITDA1 419 388 (7.4)%

Adjusted EBITDA margin 33.6% 30.1% (3.5) pts

Adjusted EBITDA less capex 86 98 14%

Adjusted wireline EBITDA lower by 7.4%

1 Adjusted EBITDA before restructuring costs in Q1-12 and Q1-11 were $397 and $423 million, respectively, down 6.5%.

TELUS TV customer growth

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Q1-11

44K 44K

Q1-12

TELUS TV net additions*

TELUS TV subscribers*

* Includes both IP TV and TELUS Satellite TV subscribers

Q1-12Q1-11

358K

553K

Momentum continues with TV net adds of 44K Total subscribers up 54% surpassing 550,000

Q1-11

1.18M

TELUS high-speed Internet customer growth

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Q1-11

16K

Q1-12

16K

Stable growth in HSIA despite competitive environmentTotal subscriber base up 6.3%

High-speed subscribers

Q1-12

1.26M

High-speed net additions

TELUS network access line losses

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Q1-12 Q1-12

-33K

-47K

2K

-10KQ1-11

Q1-11

BusinessResidential

Residential line losses impacted from price-based competitionBusiness line losses reflects competition, and wholesale adds in Q1/11

Q1 2012 consolidated financial results

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($M, except EPS) Q1-11 Q1-12 change

Revenue (external) 2,531 2,631 4.0%

EBITDA1 986 1,009 2.3%

EPS (basic) 1.01 1.07 5.9%

Capex 409 441 7.8%

EBITDA less capex 577 568 (1.6)%

Free cash flow 162 358 121%

FCF growth driven by lower discretionary defined benefit pension contributions, increased EBITDA and lower financing costs

1 Q1-12 adjusted EBITDA of $1,010M excludes a $1M equity loss for residential component of TELUS Garden real estate joint venture and Q1-11 adjusted EBITDA of $970M excludes a $16M non-cash gain on Transactel.

EPS continuity analysis ($)

1.01

HigherNormalized EBITDA1

Higher Pension

Q1-12 reported

1.070.13

HigherDep & Amort

0.04

-0.06 - 0.02

Q1-11 reported

0.97Excl.

Trans. gain

LowerFinancing

costs2

1 Normalized EBITDA excludes $0.04 combined for restructuring and pension costs.2 Financing costs excludes $0.02 of interest on income tax refunds in Q1/12.

- 0.02 1.04Excl.

Tax Adj.

EPS growth reflects EBITDA growth and lower financing costs partly offset by higher D&A, pension and restructuring costs

Higher Restructure

& other

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Industry Canada sets spectrum auction and telecom foreign ownership policies

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Spectrum cap of 10 MHz for prime 700 MHz auction and 40 MHz for 2.5 GHz auction

700 MHz prime spectrum divided into 4 paired blocks of 10 MHz 2.5 GHz spectrum cap means TELUS should be eligible to

obtain up to 40 MHz of spectrum Auctions delayed to H1 2013 for 700 MHz and H1 2014 for 2.5 GHz Foreign ownership restrictions to be lifted for carriers with less than

10% national market share TELUS encourages government to continue to work towards full

liberalization to ensure level playing field

Policy announcement on spectrum auctions consistent with TELUS’ proposed recommendations to Government

2012 guidance confirmed

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2012 consolidated and segmented guidance confirmed

2012 guidance y/y change

Revenue (external) $10.7 to 11.0B 3 to 6%

EBITDA $3.8 to 4.0B 1 to 6%

EPS (basic) $3.75 to 4.15 0 to 10%

Capex Approx $1.85B

Q1 2012 summary

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Strong consolidated revenue growth driven by data Record consolidated EBITDA Great wireless metrics across the board (e.g. EBITDA, ARPU,

churn, lifetime revenue, postpaid net adds, COA/COR) Continued Optik TV and high-speed Internet subscriber

growth Strong FCF growth aided by lower discretionary defined

benefit pension contributions, higher EBITDA, and lower financing costs

Better than expected beginning to 2012 with strong free cash flow generation supporting an even stronger balance sheet

Strong smartphone adoption, ARPU growth continue

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1Q 2012 Smartphone base up 63% to 3.5 million year over yearData ARPU expansion driven by 36% growth in data revenue

Q1-10 Q1-11 Q1-12

5.4 5.8 6.2

22%38%

56%

Postpaid subscribers (millions)Smartphone % of postpaid

$13.14$17.71

$22.83

Q1-10 Q1-11 Q1-12

Wireless Data ARPU

Future friendly home – continued strength in Optik

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TV and High-Speed Internet loading exceedingresidential NAL losses for seventh consecutive quarter

TELUS TVResidential NALs

High-speed Internet

Q1-11 Q1-12Q1-10

60K

-39K

60K

-30K

38K50K32K

-43K-50K -33K -47K

29K44K 44K

3K

16K 16K

Continued new innovations for Optik TV

Twitter app for Optik TV

Tweet what watching Optik TV, follow what others saying about favourite shows through ‘TV Tweets’

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Optik TV for Xbox 360

TELUS Optik TV first in world to offer customers gesture & voice control ability with Kinect

Optik on the go

View select TV On Demand content on your mobile device, anywhere in Canada

Appendix – free cash flow

2012Q1

2011Q1

C$ millions

Adjusted EBITDA1 970 1,010Capex (409) (441)Net Employee Defined Benefit Plans Expense (Recovery) (9) (1)Employer Contributions to Employee Defined Benefit Plans (235) (116)Interest expense paid, net (61) (55)Income taxes received (paid), net (66) (48)Share-based compensation (5) 7Restructuring payments (net of expense) (23) 2Free Cash Flow 358

(169) (188)Dividends

Working Capital and Other (168) (62)

Funds Available for debt redemption (164) 61Net Issuance (Repayment) of debt 170 (39)Increase in cash 6 22

Common and Non-voting shares issued 17

Acquisitions (60) (32)

162

Dividends reinvested (DRIP) 54 -

1 Q1-12 and Q1-11 adjusted EBITDA excludes a $1 million equity loss for residential component of TELUS Garden real estate joint venture and a $16 million non-cash gain on Transactel, respectively.  

-

Real estate joint venture - (15)

Appendix – definitions

EBITDA: Earnings before interest, taxes, depreciation and amortization Capital intensity: capital expenditures divided by total revenue Cash flow: EBITDA less capex Free cash flow: EBITDA, adding Restructuring costs, net employee defined

benefit plans expense, cash interest received and excess of share-based compensation expense over share-based compensation payments, subtracting the non-cash gain on Transactel, cash interest paid, cash taxes, capital expenditures, restructuring payments and employer contributions to employee defined benefit plans.

Cost of retention (COR): total costs to retain existing subscribers, often presented as a percentage of network revenue