Good morning ladies and gentlemen. Welcome to the TELUS Fourth Quarter Conference Call. I would like to introduce your Chairperson, Mr. John Wheeler, Vice-President of TELUS Investor Relations.

Thank you very much and welcome to the TELUS Fourth Quarter 2005 Conference Call and webcast. Let me introduce the TELUS executives online with us today. With me are Darren Entwistle, President and CEO; and Bob McFarlane, Executive Vice-President and CFO. We will start with introductory comments followed by a question and answer session. The news release on the fourth quarter financial and operating results and detailed supplemental investor information are posted on our website at Telus.com. For those with access to the internet, the slides are posted for viewing at Telus.com “Investor Call”. You will be in listen-only mode during the opening comments. Let me now direct your attention to slide 2, the forward-looking nature of the presentation answers the questions and statements about future financial results and targets are subject to risks and uncertainties and assumptions. Accordingly TELUS’s actual results could differ materially from statements made today. I opt that you read our legal disclaimers and refer you to the risks and assumptions outlined in our public disclosure and filings with Securities Commissions in Canada and the United States. Now over to Darren just on slide 3.

Good morning and thank you for joining us today. Today I will recap TELUS’s full-year results for 2005, and review the benefits of our recently ratified landmark collective agreement with the TWU. Finally I will cover the ongoing program for returning capital to investors and also touch on our key priorities for 2006. Moving to slide 4, the clear beam for 2004 is that TELUS once again demonstrated the resilience and strength of our business strategy. This strategy has been executed consistently for over 5 years focusing on national, wireless and data growth fueling it by its acting continued efficiency gains from our core operations. This strong growth overcame a non-recurring negative impact of our labor disruption in the second half of 2005 and the ongoing competitive impacts that we face. At the consolidated level, TELUS delivered strong revenue and EBITDA growth in 2005, up 7%. This with despite the labor disruption here in Western Canada that resulted in $133 million net impact on TELUS’s operating expenses. Focusing on TELUS’s bottom-line earnings and cash generation, net income was up 24% and free cash flow was up 13%. Notably TELUS achieved or exceeded all of our original 2005 consolidated target set over a year ago despite the unplanned work stoppage. Furthermore, we have established a distinguish track record in realizing the detailed targets we have set with investors over the last six years. In this regard TELUS has met or exceeded 88% of a 33 consolidated financial target communicated to the street over the six year period. Slide 5, shows our wireless and wireline business segments. What is particularly important for investors is that with the release today of TELUS’s subscriber results, it is clear that the wireless industry in Canada not only continues to grow but in fact accelerated in…

Well, thanks Darren, and good morning everyone. Let me begin with review of TELUS’s excellent fourth quarter wireless results shown on slide 11. TELUS continues to deliver double-digit growth across the board, excellent wireless revenue growth of 16% was driven both by strong subscriber growth and continued ARPU expansion. EBITDA grew 14% reflecting higher cost of acquisition expense associated with record gross additions of 421,000 which is nearly 69,000 more than last year. And also includes 3 million in additional net expenses incurred as a result of our labor disruption in Western Canada. We are pleased that we are able to successfully increase our wireless CapEx, the increase is a result of the deferral and some third quarter network capital into the fourth quarter due to the labor disruption. And primarily relate to our strategic investments in our next generation EVDO capable wireless network. Turning to slide 12, TELUS reported record fourth quarter net additions of 235,000 new subscribers. While postpaid net additions remain relatively stable year-over-year had a 143,000, TELUS experienced strong growth in prepaid during the fourth quarter. Our seasonal promotions in the prepaid space were quite effective in driving volume in this category. Prepaid represented about 39% of our fourth quarter net additions. Our total subscriber base increased by 15% year-over-year, with postpaid subscribers as a percentage of total subscribers remaining at an industry high 81% of our 4.5 million total subscribers. Turning to slide 13, since TELUS is the last major Canadian carrier to report wireless additions, we now have the data to review subscriber growth momentum in the Canadian market. As you can see despite some recent fears to the contrary, the industry continued to grow at an accelerating pace. There were roughly 680,000 industry net additions in the fourth quarter of 2005 and nearly…

Thanks Bob. Just before I turned the call over to Haggy to conduct the Q&A session, can I please ask your cooperation for one question at the time please. However if you do need a follow-up question related to the answer to your first question that is appropriate. Haggy, please proceed.

Thanks very much. Bob, the COA increase of 10% was a bit of a surprise. Just given that the postpaid gross in that addition seem to be more or less flat year-over-year. And the subscriber increases really more on the prepaid side which is usually associated with lower COA. So I am curious, first of all, is this a one time increase that we saw in the fourth quarter with COA going up? Or you finding it a little bit more difficult perhaps to continue adding the customers going forward? A – Darren Entwistle: Oh Jonathan couple of things. Firstly, I think we need to keep in mind that these results were accomplished during the quarter when we had a labor disruption. So one of the tactics the company shows to you was to elevate our media spend in the quarter in part to compensate for that factor. So it’s a little difficult to say as to what would have occurred in the absence of disruption but clear I think there would have been no more throughput et cetera and a better result on that basis. I try to point out the way of course that we do look at is the efficiency to spend and given the ARPU churn profile that subscribers we certainly have, again a good return on the COA investment. I think as well in the quarter there is a bit of a tactical shift lead by some of our competitors to point of purchase promotions which we responded to later in the quarter and of course those are variable with that, so you don’t get a scale pick up as volume pick ups as a result. So, whether those types of promotions and activities that continue I am not so sure, they are typically associated with a Christmas type of promotion season. So target predicts the dynamic in the interplay between competitors, but I think you should see a return to more normal COA levels in our organization in the wireless front.

Now, you mentioned the advertising cost or spent went up during the labor strike. Is that something then that we should assume that should more or less not happen again, say next holiday season for 2006, that there were some component in there that was more one-time in nature? A – Robert McFarlane: I don’t think I can give you assurance one way or the other. We certainly are not comfortable with giving our long range, the media campaign tactics, on a public environment like this. Obviously we review the efficiency, I think anyone who is watched TV etc. can only be impressed with the quality of the advertising that we continue to have and we found it to be effective, and as to what the intensity will be going forward, I think we’ll have to remain tight with that.

If I could ask a definition or clarification question; on COA I noticed the general and the admin cost it really accelerated in the fourth quarter up about 21% compared to 9% run rate in the rest of the year. Was there some impact with COA within that category, how do you define the COAs what I am getting at? A – Robert McFarlane: Well, I think you are referring to the wireless COA?

Correct. A – Robert McFarlane: Yeah, okay so wireless COA principal components we consistent as, we already mentioned the media spends call that advertising as well as promotion. The commissions are paid to the distribution channels along with the handset subsidy. And so those are the principal elements that comprise it and they are in the operating expense line for, on the wireless side but specifically in marketing.

So nothing in that, necessarily in general within then then? A – Robert McFarlane: Not that I can think of, no.

Okay well before John cuts me off, I am going say thank you very much. A – Robert McFarlane: You are welcome.

The next question comes from Vince Valentini with TD Newcrest. Please proceed with your question.

Thanks very much, stick with the wireless metrics here, the retention spending jumps to 7.3% of revenue from 6.2%, can you give us any color on whether that’s a good run rate going forward, if there is anything one-time in nature in there and can you give us any color on what you are getting in return for those investments, what type of contract links, can you give us any sense of where your base is right now and whether that’s improving in terms of more through your contracts versus the way you had a year ago? A – Robert McFarlane: Okay well, basically we look at retention spend effectiveness as a function of whether it’s correlated with driving a churn rate lower or not, and in that respect I mean we had a labor disruption and had a reduction in our churn rate. So, think about that one for a minute and I would suggested that our retention efforts have been quite successful, so from that standpoint the answer is we’re quite pleased with the efforts, there is an experimental aspect to it from time-to-time, you take it up or take it down and just see what the incremental change is, so you can be sure that you’ve got the right correlation factors, and therefore our spending at the right levels, we generally found though that it’s a is a high return on investment for organization. So we’re quite happy with what occurred in the fourth quarter.

And just a clarification follow-up, how would you count Voice over IP customers that you provide the wholesale service for, do you count those in your business or residential access lines? A – Darren Entwistle: They would, to the extent that we have a line provided to our wholesale operation to another carrier, it would be reflected in our business NALs.

Okay thanks.

Your next question comes from Marje Soova with Goldman Sachs. Please proceed with your question.

Thank you, just wanted to ask if you could give us any more detail in terms of the prepaid subscriber economics, prepaid can produce much as higher than postpaid due to the high per minute revenues as we’ve seen from European experience, but the key is to keep the acquisition cost low. So I wanted to just get a sense of, is there anything you can help us with in terms of margins, how they compare prepaid versus postpaid for TELUS and cost of acquisition as well? Thanks. A – Robert McFarlane: Okay well what I can do is point out in our case around it, our ARPUs for prepaid in the fourth quarter were $26 per subscriber. So on the Canadian contacts that would compare to the low-teens for most of our competitors. So there is a quite different financial or economic analysis or implication I guess when you compare the different prepaid offerings. In our case, for a variety of reasons, the type of products we sell, the type of market segments we market towards, the purchases of their prepaid product end-users, use it a fair bit and generates the $26 ARPU. As you know our overall churn rate at 1/4th is a blended one but having said that in our case we have a, a healthy lifetime revenue for prepaid, then the key is I think you are employing is, if you want to have an efficient cost of acquisition in terms of obtaining subscriber, in our case we were quite successful in the fourth quarter with a program that was quite easy to purchase bundles on the airtime along with the handset, and I think was immensely popular as you get product. So that is, that outcome I guess is fairly conventional in terms of the Canadian market or the fourth quarter prepaid definitely takes this fight up and that’s what we saw in our case to about 39% of our total additions. So at the end of the day, outlined in this call I won’t give segmented COA and churn et cetera, safest to say that we’re happy with the return profile the prepaid, but having said that, I think, reflecting the 89% of our -- 79% of our base which is postpaid already, our primary marketing effort is directly towards the postpaid space.

Okay Haggy next question please?

Your next question comes from Peter Rhamey with BMO Nesbitt Burns. Please proceed with your questions.

Bob, I was hoping to…

One moment please. Please go ahead Peter.

Hello Bob, can you hear me?

Yes I can Peter.

Oh great. How quickly does the – is the strike related impacts go away in Q1, you had a $0.10 impact this quarter. I think experiencing – sometimes these impacts can, I mean go on for a number of quarters after despite this result. I was hoping if you could give us a correction in that?

Yeah, fair enough, Peter. Our strike ended in late November, the reality is that with the back to work program, sound like they are going to return to work the next day. So it was over a number of weeks and we gradually returned to our operations to normal. So I would say that while the – virtually entire fourth quarter was affected in one way or the other in a significant fashion by the disruption. As we get to January 1st and on in the first quarter there is really minimal impact. So I wouldn’t expect that there would be any notable lingering cause that will turn up in the first quarter.

Great, and if I can ask a related question then, just looking at your cash flow statement and I am trying to isolate where the labor settlement cost might have been accounted for here?

Okay, excuse me. The labor, if you recall – because our contract expired almost five years previous, we have been accruing for the labor settlement in our accrued liabilities and payables. And so, then as people return to work which as you may recall approximately 60% of our Bargaining Unit members in Alberta get returned to work during the labor disruption. If they returned by certain date they received their lump some, more portion of their lump sum catch-up payments owe to them. So a portion did grow up in the third quarter, and then the bulk of it of course went out in the fourth quarter. So essentially it’s a reduction of the payables and that what show up on the slide that I had in terms of the working capital volume. So there was no incremental cost to the P&L, because the expenses that already been occurred.

Right, and on a free cash flow basis, it would have impacted your free cash flow number in the quarter?

It would, because it was netted into the working capital, it was virtually all paid out in the fourth quarter, it’s reflected in the ’05 numbers.

Could you share that number with us?

Well, it was approximately $200 million in payments.

In total?

In total, yeah.

It’s not in the quarter level?

That’s correct

Okay thank you.

Next question please.

The next question comes from Robert Goff with Haywood. Please proceed with your question.

Thank you very much. My question is a follow-up on Vince’s. Could you go over the percentage of wireless adds that were on two-year or three-year contracts, and then also give us some perspective on where your base would be on for contracts? Thank you.

Bob, for competitive reasons, we don’t think it would be prudent to give the disclosure in terms of how many, one, two, or three years contracts, suffice to say that our organization has been offering three-year contracts for a number of years now and so, presumably whatever the distribution is in the industry we would be more elongated in terms of duration that appears.

And that would have been true as well on the quarter?

I really don’t want to get into the specifics, certain competitive implications be wiser to avoid.

Okay thanks Bob.

Okay Haggy next question please.

Next question comes from Jeff Fan with UBS. Please proceed with your question.

Thank you very much. Just wanted to ask a little bit about the office closure and the contracting out of the five people that were affected by that, can you elaborate on the number of people that accepted voluntary retirement or your departure plans? And then the second related question is in terms of the integration of the wireline and wireless operations. Are there any redundancies that’s, that you are going to able to remove through that integration? Thanks. A – Darren Entwistle: Thanks for the question Jeff, in terms of what we have done in the first phase of our contracting out of non-core operations within the TELUS home, we have proceeded with the contracting out provision that have allowed us to affect up to 507 positions within TELUS. Of those 507 positions about 60% have been reduced or eliminated within TELUS and the remaining people are being reassigned back into core operations, that effectively relates to the outsourcing activity in addition to that we are also, as I indicated in my remarks enjoying efficiency gains in respect to office closures or consolidations, as it relates to call centers and dispatch centers and we will be looking now going forward to the future to either eliminate or reduce a further 200 positions as a result of those initiatives, that is still to come. But thus far we’ve done 507 in terms of the positions impacted by contracting out, 60% have been effectively reduced with the remaining 40% of the positions being reassigned to core operations within TELUS.

So, the 200 position is that, in addition to the 500? A – Robert McFarlane: That’s correct.

Okay. And on the integration of the wireline and wireless? A – Robert McFarlane: We haven’t disclosed any, particular targets in that regard, suffice to say that within the $100 million OpEx provision that we have for workforce restructuring setup for 2006, a material element to that will support the implementation in the new collective agreement but a portion of that money was to be set aside to pursue operating efficiency and effectiveness gains owing to the merger of our wireline and wireless business.

Well maybe just qualitatively prior to the integration, what sort of – what were some of the support services or functional areas where, wireless and wireline were still kept separate, I guess for instance financial, legal et cetera? A – Darren Entwistle: Yeah I think in terms of areas like shared service functions as they relate to human resources or finance or legal or regulatory, that there are opportunities there for synergies in terms of the business enablement functions as we bring together IT and in effort there’s opportunities is for not just efficiency synergies but productivity gains owing from the dissemination of best practice across both organizations, and then on the customer facing business unit front we also have the opportunity to improve our economies of scope in areas like our channels to market taking one channel that would previously support one product and expanding it to support a multiplicity of products across wireline and wireless allows us to get better economies and scope out of our channels to market and that delivers a productivity gain to this organization and then add to their sales effectiveness.

Okay great, thanks a lot.

Your next question comes from Vance Edelson with Morgan Stanley. Please proceed with your question.

Thanks a lot, and good morning. The prepaid strength was impressive considering that Virgin Mobile into the market almost a year ago and presumably they were fairly well positioned for the holidays, could you just comment on the impact that they are having so far, and how you see yourself as competitively positioned in the prepaid market? Thanks. A – Robert McFarlane: Well Virgin Mobile is a, I guess the reseller of the mobility network, so I am sure they would have more in forum using Sierra partner there, they have more forum response than we would but Virgin Mobile is a target almost exclusively on the use space. So and only on prepaid so from that prospective I guess you could refer to them as a niche marketing organization. In our case we have a much more broader – a broader appeal to the marketplace, and I think your comment is correct that, what is, it is impressive and we did so well in spite of the competition, not only on the likes of Virgin Mobile but you also have the Bell Mobility branded solo, prepaid offering and of course the traditional strength at the, the FIDO come into Rogers organization, so I think to their credit probably deemphasized loading on the prepaid space both in the fourth quarter and in the past year. At the end of the day the TELUS brand is one of the most recognized and like brands in all Canada and from that standpoint Virgin Mobile is surely a brand recognition in the Canadian market.

Okay thanks bob.

Next question please.

Your next question comes from Greg Macdonald with National Bank Financial. Please go ahead with your questions.

Thank you good afternoon, excuse me. We heard some strong commentary and actually saw some strong action, reasonably strong action from Bell Canada on pricing rationality. You compete with them on the wireless side, I am wondering did the comments affect your thinking on promotional or pricing potential activity going forward. And in particular on pricing and I can appreciate you are the highest ARPU Company in the market. But on pricing, do you get the impression that there is still room to increase prices in 2006 given the competitive environment? A – Darren Entwistle: Well Greg, I think the answer to that is yes, and there is also room to reduce the prices, it’s a combination of the two in a very dynamic and competitive marketplace. I think the issue goes to being intelligent to go once pricing and certainly the comments that we’ve heard from our competitor are encouraging ones. But of course we have not been the resource of lot of unnecessary discounting in the marketplace. So, I think the implications are more meant for some other parties. I think one of the issues in the wireless space goes to; we are the only company that’s operating without a discount brand in the marketplace. Yet we actually lead the industry in subscriber additions. So I think that gives rise to the question that both the effectiveness and efficiency of multi-branded approaches in the marketplace. And whether they are really accretive to value in terms of having these discount brands. Most recently, presumably I’ve noticed divestments for the Rogers organization basically saying that their discount brand FIDO, which until recently has been marketed as discount brand with interior coverage, now has the equivalent coverage on digital basis, so their whole Rogers network so. That’s all, its the same handset, same coverage at a different price point in the marketplace. So, obviously that’s – that type of tactic in the market is necessarily when it that promotes a disciplined response by the competitor. So I think it’s going to be very important to see not only what Bell forts are but with some of the other enterings in the marketplace such as Rogers, how they behave in our case we’ll act accordingly.

Okay, maybe just a quick follow-on on that, and rather than the opportunity for price increases which I was sort of implying on the high-end on the business side. If I am thinking about lower-end or lets call it used markets, do the comments give you any comfort on your ability to sustain the higher than average ARPU that you have on your prepaid side? A – Darren Entwistle: Well, I would say directionally of course comments like that are helpful. We need to see how they translate to actions and respond. And again it’s a competitive marketplace. So traditionally we’ve seen, if you look at our own results last year, we had price reductions our self on certain basic rate plans on our voice bundles. But at the same time, the adoption for data and the subscription for additional features and the like and just along with increased usage, more than offset that. So, its understanding that balance and making sure you end up on the accretive side of the equation and really data providers us all the opportunity to do that. So, where we get most disappointed I think is when we see someone have a differentiated product, whether it would be the RAZR phone or a new data offering in BlackBerry et cetera. And yet uses add as a promotion vehicle when they have unique differentiation in the marketplace. And that’s the kind of thing would be contrary to our approach, the marketplace and is probably money being left on the table.

Okay, thanks very much.

Operator, can we have a one more question please.

Yes, the last question comes from John Henderson with Scotia Capital. Please proceed with your question.

Yes thank you and good morning. I am wondering if you could, if you’ve actually accessed what the revenue impacts of the strike were in the quarter and overall I guess? Hello? A – Darren Entwistle: Well, it’s a – John, I guess it’s a good question, it’s – the reality is we have some internal estimates but it’s a bit of a mugs game because you are really assessing what would have happened if we didn’t have a strike and of course since we had a strike we don’t know for sure what would have happen, obviously would have been better. I think it was also important for people to understand as the organization made a very important strategic decision during the labor disruption when we had the return to work that so many people in Alberta, it certainly gave us the opportunity to go one of two ways. We could either go more towards minimizing the expenses associated with the labor disruption and perhaps try more of the traditional service levels that are realized or maintained during disruption or and choose as we did to continue to deploy management overtime and other resources along with working Bargaining Unit members to maintain services levels the best we could. And because we did that, I think we are seeing in the results reflected here some resiliency in the revenues, I mean our revenues basically healthy year-over-year despite the incremental competition in the wireline space and despite having a labor disruption. So, from that standpoint I think we benefited, obviously we could have drove higher revenues, an example of that clearly is in the internet space. So I think you can take a look at the numbers that we did and you could probably estimate what we would be able to do if we didn’t have the strike, the fact that no outbound marketing for the fourth quarter. Obviously in a period with our ability to market aggressively on either internet or long distance et cetera. So at the end of the day, I don’t have a hard number for you, there is a number there but I think the most important thing for investor is as we come out of this phase, really not adversely affected in terms of the robustness for organization to build growth in the near future.

Okay, another quick follow-up in wireless. On the promotional activity side, do you think that it’s a sort of a necessary development that your promotional activity is higher than it was in the past and it will continue on an ongoing basis, how it relate to offset through the handset advantages of GSM like the RAZR and the Rocker and these things that, now you got a RAZR that can you just respond with but and expect though probably continue? A – Darren Entwistle: Yeah, the reality is that it has some flows. I think what did occur in the fourth quarter is that our competitors were very quick out of the shoot in October to a point of purchase gift with a purchase promotions that were quite affecting the marketplace. So we responded really in the November timeframe, so it’s interesting when you look at the quarter you say record fourth quarter. Well it wasn’t exactly a fast quarter in October for our self. So it shows just how well we did in the back half of the quarter. So in that case clearly we were responding to an extent to what occurred. We certainly have adjusted our prepaid offering in the marketplace, so the same offering doesn’t exist anymore in the first quarter. And what we will do going forward is very much an interaction or an interplay to the dynamics of what each competitor does in the market. So, I really don’t want to give you too much color on a go forward basis for competitive reasons, but suffice to say, I think that market has found the point of purchase promotion is effective that would suggest that they may be repeated but it’s hard to say.

Okay thanks very much.

Okay. Thank you very much everybody for joining us today. We really do appreciate your interest and the continued support of TELUS and we look forward to working with you in the coming quarter.

Ladies and gentlemen thank you for participating in the TELUS fourth quarter conference call.