Good morning ladies and gentlemen, welcome to the TELUS third quarter 2008 earnings conference call. I would like introduce your speaker Mr. John Wheeler. Please go ahead.

Welcome and thank you very much for joining us today. We’ll start with introductory comments Bob McFarlane, Executive Vice President and CFO. This is will be followed by a question-and-answer session. Darren Entwistle, President and CEO will be joining us for this Q and A session, given the unprecedented stock market turbulent being experienced by our investors and the importance of last month’s announcement of TELUS’ implementation of a next generation wireless network. This is call is scheduled for one hour or less. The news release on the third quarter financial and operating results and detailed supplemental information are posted on our web site. In addition for those with the internet access, the presentation slides are posted for viewing at TELUS.com/investors. You’ll be in listen only mode during the opening comments. Let me now direct your attention to slide two. The forward looking nature of the presentation answers the questions and statements about future events are subject to risk and uncertainties and assumptions. Accordingly, actual results could differ materially from statements made today, so do not place undo reliance on them. We also disclaim any obligation to update forward-looking statements except as required by law. I ask that you read our legal disclaimers and refer to the risk and assumptions outlined in our public disclosure and filings with securities commissions in Canada and the United States. Let me direct your attention to slide three that highlights the topics that Bob will be covering in his presentation. This includes both segment and consolidated reviews, plus updates on key developments listed there. Now over to Bob on slide four.

Thanks, John and good morning everyone. Let’s begin with a quick summary of the wireless highlights referring to slide five. TELUS reported strong wireless results positively affected by continued success of the Koodo brand and strong execution and SMART phone space. Gross and wireless editions were a TELUS third quarter record, excluding the impact of the analog network turn-down, which I’ll explain in a moment. This success bodes well for TELUS’ ongoing revenue growth and the attractive future economics that this growth should generate. Wireless data revenue’s increased by 56% due to the accelerated adoption of SMART phones, which is driving increased use of data services and to a less extent, increased data roaming revenues. The continued decline and voice ARPU was partially offset by the strong growth in data ARPU. Wireless EBITDA period was impacted by the strong subscriber loading, increased retention spending, focused on SMART phone sales, including the migration plan, as well as increased data cost of sales. Of course a major development was the October announcement to build a next generation wireless network and add into HSPA network sharing agreement with Bell Canada. I’ll now describe our wireless results in detail starting on slide six. Wireless revenues were up 9%, based on the 11% growth in wireless customer space, while overall revenue prescriber declined slightly. EBITDA as adjusted was relatively flat and impacted by records subscriber loading as well retention efforts focused on SMART phones. In addition, we also saw increases in certain network operating expenses due to very strong growth in data usage and roaming, as well as higher content and licensing costs from the excellent 56% increase in data revenues. CAPX was flat year-over-year, due to deferred spending, in advance of our HSPA network build-out, which is now well underway. Turning to slide seven.…

Yes, just before I turn the call over to Ron to conduct the Q&A session, can I please ask your cooperation? Once again, one question at a time please. Ron, please proceed.

Great. Thank you. (Operator instructions) The first question is from Dvai Ghose from Genuity Capital Markets. Go ahead please.

Yes. Thanks very much, good morning. Bob and if Darren's on the call, I just wanted to ask you about some of the wireless things that are happening in the market, just this week, we have seen Fido and Solo remove their SAF, Bell announced roll-over minutes. You've announced on some new jumbo bucket plans. I am seeing a fairly significant change in pricing here. Questions I am getting from investors include, can we sustain the SAF in the premium brands if they are not in the flanker brands? Does TELUS have to show some leadership here in your opinion in terms of perhaps doing something like reintroducing a SAF on the flanker side? And even on the cost side, where you see tremendous subsidization of PDA's which should lead to longer term cash flow, do you think there is a fear that the industries are being too aggressive in terms of these subsidies and perhaps too forward-looking and not looking enough in near-term margins?

Thanks for the question, Dvai. First, I would say as a caveat, we are not going to discuss in an open form what our specific pricing strategies are whether it is Koodo or right through to smart phones. I do think the price changes that you have seen this past week in the marketplace reflect a couple of things. Number one is the relative strength that TELUS has enjoyed in the RIMS smart phone market and the strong performance that we have delivered in that particular vein, as well as the significant attraction that we have realized with our Koodo brand. I think it is also reflective of the fact that the market is going to evolve in the future with potential new entrance on the AWS front. I think in terms of describing TELUS' response as taking a leadership position, I think rather, TELUS will adapt and will respond to market price conditions as we deem appropriate and certainly, we will be competitive in the marketplace. So, I think it is fair to say that we are not going to ignore the price changes that have taken place. We are going to price to remain competitive and we are gong to price according to market conditions. The other thing I think, Dvai, that is noteworthy is that hopefully, people within the regulatory government area are taking note of the degree of the intensity of competition in the marketplace. Certainly, when you are providing very low prices for significant SWAS of bandwidth up to 500 MHz sort of unlimited and at the time subsidizing devices right down to a $0 price. If that is not competitive to the extreme, then I do not know what is. So, hopefully, people in the regulatory front as well as new potential entrants will…

Next question please.

Thank you. And the next question is from Glen Campbell from Merrill Lynch. Go ahead please.

Yes. Thanks very much. I wanted to pick up on the wireless sufficiency scene. When you announced the HSPA build, Bell had been quite opened about the fact that they expect to see pretty significant reductions in the long-term capital intensity. I think it is reasonable to kind of project 7% to 10%. So, given that you are going at this together, is there any reason to think that your sub-10% CapEx to revenue may not be achievable in the medium term for you as well. Thanks.

Glen, I think capital expenditures are a function of a number of things, one of them in part is the function of your growth and your capacity requirements thereon. We are not here giving long term capital intensity guidance. We did at the time denouncing the HSPA technology path towards 4G give guidance as related to one. We are not shifting from this year's $1.9 billion capital expenditure program. So, really, what we have done is defer the expenditures earlier in the year and shifted that into HSPA without increasing the quantum, if you will, and then we gave guidance in respective of next year, which by the way, is not that far of line with the capital intensity that we have experienced in recent years. So, at the end of the day, I think if we first start with what is in front of us, we are looking towards building a HSPA network here in partnership with Bell on a national basis to provide advantage per firms without any material increase in capital expenditures for the organization. I think that is pretty good going step number one. Step number tow, beyond that, we do believe that there are efficiencies as it relates to the technology as compared to the cost structure of our current technology and that bodes well in terms of, as Darren already just referenced, in terms of the cost to support data growth and subscriber growth in the foreseeable future but I am here to give a specific guidance, long term in terms of capital intensity.

Okay. Ron?

Thank you and the next question is from Jonathan Allen, RBC Capital Markets. Go ahead please.

Thanks very much. Bob, I looked at your revised EBITDA guidance from mobility, it seems to imply that Q4 EBITDA should be anywhere from down 5% to up 5%. Is this a reflection that you expect Koodo loading to continue being very robust in the fourth quarter, enhanced COA just continuing to pressure some of the margins? Or is this a reflection of some of the intensifying wireless competition that you had addressed earlier and that we should expect this sort of run rate for margins going forward as new competition comes into the market next year?

Well, firstly, as you are familiar, Jonathan, the fourth quarter always sees no highest period of time for subscriber editions and consequently, it does attract the highest cost of acquisition just associated with higher loading that occurs in that time frame. So, the traditional pattern is depression of margins in the fourth quarter. Having said that, we have had some good subscriber growth as these results show on the first nine months of the year, so, we got a flow through affect of those subscribers and there are too falling down from the top line and helps medicate that. But at the end of the day, as we set just targeting November where the bulk of sales are in the last four weeks of the year, the RIMS really reflects that fact that there is a variety of outcomes depending how successful our loading is in this very important fourth quarter season.

Okay. Ron?

Okay. Thank you and the next question is from Vince Valentini from TD Newcrest. Go ahead please.

Yes. Thanks very much. Good morning. Given the traditionally low flow through of revenue, the EBITDA for your wireless business had only 2%, way below than what you have done historically and then you already noted that the big increase in your retention spending. Given the investment you seem to be making in the future in smart phones, could you help us understand how that is going to help you in the future by telling us what percentage is based on smart phones and what percentage of the net or gross adds in the third quarter were smart phones?

Vince, I understand the question, I think there are elements that sensitivity to disclosing that data that I think would be more harmful to our shareholders and it would be benefit from understanding information.

Okay. Ron, next question please.

Okay. Thank you and the next question is from Greg MacDonald from National Bank Financial. Go ahead please.

Thanks. Good morning, guys. Wire line revenue growth in both the data and long distance segment decline year-over-year relative to the first half, you recognized that DSL subs were a little light. I am not sure this tells the whole story, though. I am wondering relative to some of the other telco results that we have seen, it is evident to me that we are seeing some re-priced on data access services and potentially LD and I am wondering if TELUS is seeing similar trends and if so, would that be an economic slow down issue? Would that be a competitive issue? If you can give us some comment on that. That would be helpful, thanks.

Yes, I think you hit one factor right off the talk, Greg, in terms, you are quite correct in reference in the internet. We were disappointed with the internet growth in the third quarter on the HSIA branch. So, obviously that had an affect in terms of as that goes into the data growth line so that did impact that category. In terms of long distance, it was not a bad result. This is obviously a commoditized product area for many years. We have seen in recent years high single digit, almost double digit declines in the industry. The results here in the third quarter is, I think, unacceptable. In that context, what we are seeing is the increased bundling of minutes in terms of packaging it with other offerings and a bundled concept particularly as it relates to some country packages and the like. And we are seeing resonance in the market with those offerings but underlying that, it is still fundamentally a declining area. I think our view is it was good going in that space for the third quarter.

Okay. Ron, next question please.

Great. Thank you. The next question is from Scott Malat from Goldman Sachs. Go ahead please.

Thanks. Good morning. In ARPU, you talked that roaming was down. Overall, I am trying to get a better picture of the more discretionary pieces of ARPU. I think that people are really starting to cut back what they can. So, I am just wondering about long distance, some of the other voice plan add-ins, what are the trends there and are people lowering their voice plan buckets? Thanks.

Well, in terms of ARPU categories, I think we are not really seeing any evidence of economic or general macroeconomic influences or impacts on our ARPUs. We are experiencing robust demand. Perhaps, one exception to that would be on international roaming particularly in the voice roaming, it was down. There is some repriced there but it also reflects traffic of visitors in the United States into Canada. But that is relatively a smaller component of overall ARPU and relations or question on value-added services, the nature of our offerings is that we are seeing significant take up for add-on features and services and APS. So, that is just having robust growth and consequently, we really can discern no negative impact on our ARPU as a result of macroeconomic conditions. Really, what we are seeing is an ongoing trend that we have experienced for a couple of years in the voice front. And of course, the one other element that is a little unique organization. The ongoing orderly migration of the mobile voice telephone center component of our my-guidance subscriber based over to our PCS service as our contracts expire leaving the mic service more and more catering to push-to-talk service. But overall, I think the point here reflecting perhaps the Canadian economy which is much stronger than that of U.S. and in particular in our incumbent regions where there is the strongest growth in Canada, we really have not experienced adverse effects from the economy on our results of any notable extent.

Thank you. Ron, next question please.

Thank you. The next question is from John Henderson from Scotia Capital. Go ahead please.

Yes. Thank you. It is a question on, I guess, wireless pricing relative to wire line pricing and I think, in the U.S., we are seeing greater access line erosion every quarter. It just keeps getting worse and then wireless seems to be having a greater impact there over time and I just wonder if you are concerned about impacts that way? Do you think we are going to move in the same direction as U.S. markets in terms of access line erosion in part aided by this lower wireless pricing environment?

I think it’s a reality, Jonathon, whether you’re talking about the U.S. or Europe that we need to be cognizant of. I think the first thing that I would point out is that if you look historically at how TELUS performed in respect to network access on erosion we have done well on a relative basis to our peer group. Again, I think the fact that the Western based economy from a GDP perspective has outperformed the Canadian average by two to three times, speaks to, A: the robustness of our incumbent footprint and the strength of our brand in Western Canada. But also the resiliency of the economy here as well. And so I think we have consistently, quarter-in and quarter-out, since the onset of more intense competition done very well in terms of our resiliency from a network access line loss perspective. Second thing that I think is worth highlighting is that for us with a national footprint we have a situation where fixed wireless substitution on a net basis is actually a positive for the TELUS organization. Yes, it’s a challenge within our ILEK footprint that we necessarily need to be cognizant of and address. But it’s and opportunity outside of our traditional franchise area because we don’t have a consumer wire line business as it relates to two-thirds of the Canadian population. We arerincipally talking about key markets like Ontario and Quebec. In that case fixed wireless substitution is positive for the TELUS organization particularly given how well both of our brands resonate with the youth market. TELUS has always enjoyed strong elasticity as brand appealing to all constituencies from corporate through the young people. We’re seeing the same traction in respect of our Koodo brand. So, in terms of our of franchise area expansion it…

Ron, next question.

Great, thank you. The next question is from Peter Ramey from BMO Capital Markets. Go ahead please.

Great. Bob or Darren, I’d like to focus on the restructuring charges. It sounds like you’re implementing quite aggressively some restructurings in the fourth quarter. Is this to get a running start on '09 so you get the full benefit early on or do you see this as more a slow burn or slow benefits? And in the past you’ve indicated the savings based on restructuring charges and intended to, if I’m not mistaken, to be a one year pay-back. If you could discuss perhaps what type of pay-back you would expect on that. Thank you.

Thanks, Peter. No, it doesn’t reflect a ramp up in Q4, it reflects rather our inadequate performance as an organization in Q1, Q2 and Q3. I think I articulated at the Q2 call that I was not satisfied with our performance in this particular area and that we were going to do something about. I think that with the augmentation of our workforce restructuring charge by $20 million from $30 million to $50 million that is putting into practice some of the concerns that I articulated at the call at the half year. I think maybe if you take a step back which kind of relates to my dissatisfaction, efficiency measures are nothing new for TELUS. We’ve been running workforce restructuring charges year-in and year-out since 2001 and back at that time we said this is going to an annul program for our organization. Effectively what we said is that we have to invest and improve deficiency the same way invest in products, the same way we invest in networks or IT or the same way we invest in people and it’s something that we have to do necessarily on recurring basis. And because of that I was dissatisfied that we didn’t have better traction in 2008 but this is nothing new to the TELUS organization. And what you’re seeing right now in Q4 is really addressing what should have done by the TELUS organization from the outset of this year. In terms of your other comment, I think certainly when we began tackling the efficiency program back on an inaugural basis in 2001. The pay-back periods were relatively speaking more attractive because we were really going after the low-hanging fruit and back then they, you know, pay-back periods of a year. And then we started in the '03, '04,…

Okay, thanks. Ron.

Thank you. The next question Bob Beck from CIBC World Markets, go ahead please.

Thanks, good morning. I just wanted to touch back on the bundling or the importance of bundling going forward. I recognize that you don’t give information on TELUS TV . Can you talk antidotal at all about some of the performance of some of the other products in your areas where you are offering it? You know, the high speed data and local line? And just whether that confirms some of your commitments on TELUS TV. Because it sounds like, again, fairly bullish on the performance and whether that’s to the bundle or not? And really is this still a side story to, I guess, to Darren’s point on wireless on being the core to the bundle and perhaps where more the greater win back and forward leverage might come from wireless as the core. Thanks.

I think to get this one on the head without sort of divulging competitive intelligence acouple of things are worth noting. Ironically because we had soft quarter on HSIA that I am dissatisfied with and disappointed with and something that we are going to work ardently as a management team going forward. It would be wrong to conclude that we had a soft quarter as it relates to TELUS TV. TELUS TV—IPTV has been performing very strongly within the areas where we have coverage. And I would say empirically if you look at the TELUS footprint, where we are able to offer a full suite of services from voice through to data internet, through to entertainment. And yes, as you correctly point out, through to wireless within the bundle then we have seen out best results. In areas where as a result of coverage challenges that we are looking to address in the future where we can offer the full bundle, the results on average are not as good. And so I think for the TELUS organization one of those j-curve investments is of course, to improve our broadband footprint across Alberta, across B.C. and continuing to improve it across Eastern Quebec so we can fully leverage the commercial efficacy of offering a bundle that’s very attractive to our consumer clients. And that really is the focus of the organization on go-forward basis. And I guess as it relates to HSIA, you know, my comments in terms of being disappointed , I think are borne out empirically because it’s frustrating for me because in Q1 and Q2, we had a reasonable performance. If you look at Q2 in particular on high-speed internet access, we had net ads of 24,000 which represented a 60% increase on a year-over-year basis. Yet in…

Hi, Ron, we’re at the hour so we’ll take one last question, please.

Okay, thank you. And the next question will be from Peter McDonald from GMP Securities. Go ahead please.

Thank you. Just, Darren, can you expand back on your reference to the regulators with respect to competition in the wireless market. Is there something we should read into it? Is it reference to the unset details on roaming and tower sharing or is there something else that you’re referring to ?

I think I’m referring to a simple point that is not a Q3 point, Peter, but something that I think we believe quite unequivocally here at TELUS and certainly isn’t justified empirically which is the wireless market in Canada is intense. We’ve got over 20 brands out in the Canadian market offering all sorts of value propositions from no-frill offerings for people that are just interested in talking and texting right through to smart phone offerings with very sexy devices which are function rich. So the level of choice is significant. When you think about affordability the comment is pretty clear. Two elements, when you’re giving people 500 megs of throughput, I’m not sure if people understand what 500 megs of throughput means, but it’s significant in terms of what would be a usage time equivalent within the data vernacular versus what they would be used to on a minutes basis with voice. It’s very significant. And when you’re subsidizing devices down to $0, I mean, just have a look at the delta between what the cost is of the devices versus what they’re being sold for and you’re looking at, you know, subsidies from $300 to $500 to secure customers, I think. That is in my view, highly reflective of the fact that this is a market that is very competitively intense. If you look at the type of growth that is being achieved, it’s quite interesting, we did as an industry 7% growth on wireless, 6% growth on wireless as an industry at the net level and the basis point game was 480 basis points of gain. Now which again reflects the competitive health of the industry overall. And it’s interesting to me because if you carved out Canada empirically and looked at our voice rates. Bob has…

Thanks very much, Bob and Darren and I’d just like to thank everybody on the line with us today for taking the time to join us and we look forward to working with you in the coming weeks and months.

Thank you and this concludes the TELUS third quarter 2008 earnings conference call. Thank you from TELUS.