Good morning, ladies and gentlemen. Welcome to the TELUS 2021 Q1 Earnings Conference Call. I would like to introduce your speaker Mr. Robert Mitchell. Please, go ahead.

Thanks, Mike. Hello, everyone, and thank you for joining us today. Our first quarter 2021 results news release, MD&A and financial statements and detailed supplemental investor information were posted on our website this morning at telus.com/investors. On our call today, we have remarks by Darren Entwistle, President and CEO; François Gratton, Executive Vice President; TELUS Health, TELUS Agriculture and TELUS Québec; and Doug French, Executive Vice President and CFO. As well for the Q&A portion of today's call, we will be joined by Zano Maude, President, Home Solutions; Jim Senko, President of Mobility Solutions; and Tony Geheran, EVP and Chief Customer Officer. Briefly on slide two. This presentation and answers to questions contain forward-looking statements that are subject to risks and uncertainties and made based on certain assumptions. Accordingly, actual performance could differ from statements made today, so we ask that you do not place undue reliance upon them. We disclaim any obligation to update forward-looking statements, except as required by law and we refer you to the risks and assumptions we've outlined in our public disclosures, including our first quarter 2021 MD&A our 2020 annual MD&A and filings with securities commissions in Canada and the U.S. With that, over to you Darren.

Thanks, Rafael [ph] and hello, everyone. For the first quarter, TELUS once again achieved strong financial and operational results in both of our operating segments, TELUS Technology Solutions or TTEC for short and digitally led customer experiences at TELUS International DLCX for short. Our continued execution excellence realized against the backdrop of the unprecedented operating environment was characterized by the ongoing combination of robust high-quality and profitable customer growth, alongside strong financial results throughout our business. This solid performance reflects the efficacy of our world-leading performance culture in action, underpinned by our highly engaged team and their dedication and passion for delivering outstanding connected experiences for our customers. This contributed to industry-leading customer net additions of 145,000 and globally leading customer loyalty across our T-Mobile and fixed product lines. Moreover, our results were buttressed by a highly differentiated and potent asset mix, geared towards high-growth technology-oriented verticals, which I'm going to have the opportunity to discuss in a moment. Looking at our consolidated financial results for the first quarter, revenue was up almost 9% year-over-year, while EBITDA increased by 1.9%. This performance reflects continued resilience and execution excellence and bolsters our unmatched capabilities and competitive position, as we look ahead to the anticipated post pandemic recovery, one that we're all looking forward to. Taking a look at our mobility operating results, we achieved once again industry-leading customer growth. This included healthy mobile phone net additions of 31,000 which was up close to 50% over last year. For connected devices, we realized strong net additions of 63,000 up almost 30% on a year-over-year basis, reflecting continuing increased demand for TELUS' IoT solutions. Importantly, our team delivered another quarter of best-in-class loyalty results. Blended mobile phone churn was 0.89%, representing a 5 basis point improvement over this time last year. Underlying this…

Thank you, François and hello, everyone. Consistent with our track record, our Q1 results reflect the superior asset mix, leading network and customer experience and strong operational execution. Roaming revenue declined approximately $50 million, as compared to Q1 2020 from continued reduced travel. Our mobile phone ARPU decline of 3.7% also represents the third consecutive quarter of sequential improvements. Looking ahead, we anticipate returning to positive ARPU growth starting in Q2 and with quality loading will result in network revenue growth. This will recover – this recovery will be driven by the lapping of COVID impacts, in addition to our strong underlying trends from our sustained focus on smart base management and profitable customer additions and upgrades. In addition, the impact from lower data overage revenue continues to steadily decline as we are approaching a steady state that will no longer represent a notable year-over-year impact. Customer activity was strong during the quarter and mobile equipment revenue growth of 27% benefited from upgrades and new customer growth. This higher-than-expected activity at an upfront cash flow impact of approximately $60 million, as more customers took premium devices on their financing plans. On the fix side of our business, we continue to showcase our superior customer growth with 51 total net additions, continuing the momentum that we built throughout 2020. Impressively, we posted more than double-digit revenue growth in both fixed data and fixed equipment. Clearly, our high-quality customer additions are driving important revenue and EBITDA contribution, particularly on the Internet product to help offset the pressure we're continuing to face from our legacy business services. In total, TTech revenue grew 6% and to just 1.2% – compared to 1.2% in Q4 of 2020. Additionally, despite the challenge of COVID-19 as well as scaling up costs within ag tech and virtual health…

Thank you, Doug. Mike, can we please proceed with questions from the queue?

Yes, of course. First question comes from Jeff Fan from Scotiabank. Please go ahead.

Thank you. Good afternoon. And I hope everyone is well. A couple of maybe questions related to TELUS Health. And then, a bigger picture question for Darren. On TELUS Health the quarter saw 10% revenue growth. Given all the positive momentum that you're seeing both, from the virtual side as well as a recovery on COVID, I'm wondering if you can provide some commentary about, where the growth will continue to accelerate through the rest of the year? And then, maybe some comments on margin related to TELUS Health? It's a mixed bag of business in their different revenue streams, I was wondering if you can help us for purpose of try to get some valuation for, TELUS Health on what the EBITDA margin looks like? And then, the bigger picture question is around the commentary about CapEx and investment post this acceleration, very encouraging Darren to hear about the plan beyond 2022 especially given where fiber coverage for you is going to be. But there is a lot of talk about the transitioning of telecom networks to the cloud. So I'm just wondering if, that's an initiative that's included in your pull-forward investment. Or is that something that's not likely to be that material as you look ahead in the next few years? Thanks.

Okay. François, why don't you handle the first part of the question for Jeff, and Doug if you want to kick in as well you can and then I'll take the last question. François Gratton: Okay. Hi, well, Jeff and thank you for the question. We do expect to continue to see strong growth for 2021. Some of aspects of our business like, the healthcare centers who have experienced the impact of the sanitary restrictions across the country. I've been impacted negatively from a COVID-19 perspective. And the same thing with the drug claims, adjudication or dental claims education business we have seen as well, a reduction of volume because of the same sanitary measures. We expect those businesses and those lines of business to pick-up, as we get out of these measures. And we also expect the virtual care aspect of our business or even the online pharmacy aspect of the business continue to grow significantly in the future. So we are ambitious about the future. And we are seeing strong growth for the remainder of the year. From a margins perspective, it is a mix of different assets in terms of maturity. On the HBM side or the Provider Solutions side, you're seeing a much more mature business with healthy margin. While on the virtual care side of things, online pharmacy side of things these are businesses that are still in the investment phase, but are seeking to grow profitably into the future. And holistically, when you look at to make a point on margins holistically, when you look at TELUS Health also that -- I also think that's a differentiator to other competitors in the marketplace where the business and the ecosystem reinforces each other within the ecosystem and are growing profitably into the future.

And maybe just a quick top up, so the margins were challenged a little bit during COVID, as we highlighted on the revenue component as well. And we would see recovery of that as we scale back-up from recover as François and Darren had highlighted. I think you could also send to Francois's comment, we had previously disclosed that the health margins were very similar to the old wireline margins. And I would suggest as we build the portfolio, grow the portfolio there's an opportunity that would be that or potentially more. But the bigger item that continues to be foremost in our products that is the bundling and the value that all of these assets bring to the, our telecom assets concurrently. As you remember, a lot of these customers are also wireline and wireless for the old term customers and providing or using those services. So it helps reduce our churn-rate. It helps to increase the value of our organization across the board which would be margin accretive even further.

So Jeff to give you a completely conclusive answer to your question that in respect of our transformation to the cloud or what we call our digital program, that is included in both, our base budget of $2.75 billion as well as the incremental $1.5 billion prospectively over 2021 and 2022. So the answer is, yes. It's included in that investment. And not just the accelerated component but it was already in the base investment. And maybe just to underscore that comment, for investors to understand what we've done on the capital acceleration. 90% of the accelerated capital is being directed to high-performing programs that are going concern activities, not J-curve investments. And that's focused on fiber, 5G, and accelerating our digital transformation. Those are the three headlines, in terms of the CapEx investments. And maybe to break down what 2023 looks like, beyond the sub $2.5 billion CapEx spend and the 14% or lower CapEx intensity. If I had to simplify it into three categories, I would say watch for the accelerated capital to expand profitable customer growth with its attendant, economic attributes on revenue EBITDA and cash flow. And of course that's underpinned by our expansion in fiber by our expansion in 5G and our expansion of our digital capabilities. Secondly, what perhaps has not got enough of airtime is the cost efficiency component of our capital acceleration. And this is where your question on digital transformation is extremely significant. If you look at the cost efficiency component of the accelerated CapEx, this involves our digital transformation as it relates to customer service and what we're doing within our RPA or Robotic Process Automation environment our BOT capability set. It's a digitization of our go-to-market channels. And not just on a digital basis on a stand-alone point of…

Thank you everyone.

Mike, next question please?

Our next question comes from Drew McReynolds from RBC. Go ahead, Drew.

Thanks, very much. Good morning or good afternoon everyone. Two for me. Just a point of clarification on the TELUS Health disclosure. Appreciate all the additional disclosure. Reconciling the $450 million in health services revenue in 2020 with the $800 million more broadly for the health vertical, I mean presumably that's the connectivity reconciliation, but just if you could provide a little bit of color there? And then secondly, Darren, a lot of let's say very good stuff coming down the pipe here on the accelerated capital program. On the specific piece of copper decommissioning and what that road map looks like, can you just help us level set expectations here just with respect to I guess the timing of specific benefits from that? And if there's anything magnitude wise, you're willing to kind of provide in terms of those benefits that would be great? Thank you.

Thanks Drew. François, Doug again, I'll let you guys kick it off and I'll close it out. François Gratton: Yes. Maybe Doug, I can start on the $800 million question. So Drew, that's absolutely correct. That is tied to our telecom infrastructure and digital services that are added to our health specific technology solutions. And there are great synergies to be had and we've seen it throughout the pandemic as we supported the health care system, hospitals clinics get ready for the influx of increased activity and sometimes opening new centers. And we've seen the correlation between those asks and the actual results from a telecom perspective. And I think you're going to continue seeing that correlation increasing in the future, as we continue to invest in 5G, not just 5G infrastructure, but 5G application and solutions and services as it relates to health care and other verticals. But health care in particular, you will see some use cases that really changed the way in which the Canadian Health Care System actually leverages technology to advance better health outcomes. And how the physicians the practitioners continue to interact with consumers patients more collaboratively in the future again, leveraging the use cases that will be brought forward by 5G. So you should see that correlation continue to increase in the future.

And the only other thing I would add would be, the number is lower because of the COVID impacts that we discussed earlier as well. So, I would assume as we recover that run rate would go up naturally versus assuming not the ongoing run rate and the comparison to the old numbers. So I would take the COVID discount than the telecom.

Drew, the CapEx acceleration is really unfolding now as we speak. So it's about a footprint expansion. I gave you some empiric as it relates to the 225,000 premises incrementally that are now going to be covered on an accelerated basis both urban and rural within our fiber plan. There's a similar acceleration of footprint expanding on 5G that will be augmented by the CapEx investments being made by our partner in that regard as well. And of course we are materially expanding our digital footprint as I just alluded to which doesn't just relate to our core telecoms operations, but expanding our digital capability set to support where we're going on digital health and digital AgTech. I would say, you'll start to see the financial benefits from that expanded footprint on the broadband or wideband basis both wireline and wireless supported by our digital capability set leading to increased loading and then financial results flowing from that increased loading because again the loading that TELUS will be pursuing is quality loading with positive economics. You'll start to see the financial implications manifest themselves in late 2021, but more materially at the revenue and the EBITDA level in 2022. And then significantly at the free cash flow level in 2023 and beyond at a very accelerated basis given our revenue and EBITDA expansion, the cost reduction that I alluded to earlier and a CapEx budget that will be sub $2.5 billion as it relates to our 14% or lower CapEx intensity delivering I think very exciting cash flow growth for this organization. But in terms of footprint driving quality loading and quality loading driving revenue and EBITDA financials, you'll start to see that creep into our 2021 results in the late third quarter fourth quarter went and then more materially within the 2022 financial year and then free cash flow thereafter in 2023.

And Darren sorry just on the copper decommissioning component maybe just 30 seconds on just level setting expectations on that road map? I know 30 seconds doesn't do it justice but that would be great?

An easy one to answer in 30 seconds. So the goal of this organization is to have all of our copper decommissioned within our fiber footprint by 2023. And if we can beat that and have it closer to the end of 2022 that's the type of execution that you should expect from this organization. And of course our fiber footprint is expanding dynamically as we speak. But we're looking to retire our copper infrastructure within our fiber footprint by the 2023 timeframe which will provide very exciting economics whether it's multi-product penetration, whether it's higher average revenue per home, whether it's lower cost to serve or very importantly greater stickiness in terms of our client relationships that supports augmented lifetime value. It will also support where we want to go with the simplification of our networks moving more towards homogeneity versus heterogeneity and everyone always forgets about the potency of the fiber 5G combination and all that that entails bringing in the mobility component.

Thank you.

We’ll take our next question. Next question please.

Yes. Next question comes from Vince Valentini from TD Securities. Please go ahead.

Yes, thanks very much. A couple of things for me as well. One, Doug the spectrum you purchased especially the 3500 megahertz. Was that transaction closed in the first quarter, or is that money still going out in the second quarter? And if so, can you give us any ballpark on how much you're going to have to pay for that? The second question, we're hearing about obviously the chip shortages and maybe some issues with getting Internet modems. If you continue to grow at impressive pace you have been in terms of subscribers to your forecast flow that you could start to run out of modems by summer or fall, is that a supply issue that you're concerned about? And last one, just in terms of health, I get the difference in the $450 million revenue versus the $800 million and what's in there. But when we think about your plan that I think you've stated in the past to look for financial partners or strategic partners or maybe monetize through an IPO in the future should we think about the base of revenue that's being monetized as being the $450 million or the $800 million? Thanks.

So why don't we -- Doug you kick it off. Zainul and Jim you can talk about supply chain securitization in terms of what we're doing in that regard. And Doug and I can maybe finalize the question on the final component.

Yes. So it did close in the quarter. There are some small payments to go into the future but it would be insignificant on the total and you'll see that number disclosed in the acquisitions and our new disclosure on intangible assets.

Yes. Zainul, I'll talk about mobility first and then over to you on Internet?

Sounds great.

Yes. Vince at this point our supply chain looks really solid on Apple and Samsung. But that said, I think one of the things that we've worked really hard on is building out our certified preowned portfolio. So all of our programs like trade-in and bring it back in mobile clinic, we have a really nice and robust CPO inventory and portfolio that we can fill in the gaps, if there are any gaps. And lastly, during COVID with rotating lockdowns, we've seen more bring your own device type activations that are going digital. And those are also great clients for us to sell CPO because they're looking to buy cheaper devices outright. So, we feel like we have a great plan and we're ready for any contingency there. Zainul over to you.

Thanks Jim. Yes, so we've also taken a number of proactive measures. As you outlined it is a global situation, but we have gotten ahead of it. A few things that we're doing on the wireline side of the business is we've advanced our lead-times. We've added some heterogeneity into our supply chain looking at incremental suppliers and the way in which we are servicing our customers across regeneration of activities like our WiFi Deployment Solutions. And then finally, we also have quite a robust refurbishment program for our equipment as well and we leverage that very effectively. And we're -- we have excellent execution in terms of our reverse logistics program and how we refurbish devices back into the field.

I think Vince it's also worth pointing out that one of the secondary reasons that we have been so clear and certain on the capital acceleration is to lock in longer-term supply contracts within our supply chain to support both our wireless and wireline businesses. So, to provide that clarity of accelerated spend and to strike longer term agreements with suppliers through to 2023 with that accelerated spend gives us a level of advantage and certainty within an anxious uncertain world, that's another positive attribute related to the CapEx acceleration program. And as it relates to your $450 million, $500 million, $800 million question, my answer would be both. So, from a sum of the parts valuation point of view I would say both attributes would be part of a prospective valuation. And the multiples associated with those being different whether it's the core telecoms multiple taking us up to $800 million or the circa $0.5 billion that we have as it relates to digital health and the intended higher multiples associated with that. So, when people are putting together the overall financials for that business and the underlying technology that supports it, we would guide people towards some of the parts valuation that recognizes that there are different growth profiles inherent within that construct. And then finally what we've said repeatedly which continues to be true is that investors can draw inference from what we have done at TI as it relates to what we intend to do prospectively with TELUS Health and TELUS Ag. And we feel that the best way that we can have a TI like outcome is to focus on the core principles of profitably scaling the businesses that we are building with a level of strategy operational execution and competitive differentiation that investors will find very meaningful. And earning our way if you will to an IPO if that's where we want to take the businesses in that regard. There were about six criteria that TI had to hit on an earn your way to an IPO basis and they did exactly that in spades. And it's going to be the same mentality as it relates to TELUS Health earn your way to future opportunities in that regard particularly if those future opportunities involve creating a transaction currency that can take the growth of the business to yet another level. And that's very much the philosophy being brought to bear.

Thank you.

Next question please.

Of course. Our next question comes from Jerome Dubreuil from Desjardins Bank. Please go ahead.

Hi thanks for taking my question. Two questions on the CapEx exploration plan. Maybe first on wireless. I'm trying to assess what's included in 14% CapEx starting in 2020. Does that include some buffer for expenses for future increased 5G demand or use cases that we might not be aware of yet? And second question also on the CapEx acceleration plan, maybe more for Zainul. Does that have an impact on the wireline services maybe on the future friendly home and security products as well? Thank you.

So, the answer to your first question is yes. And the 14% CapEx intensity is holistic across fixed and wireless, it's not pertaining singularly to wireless, but it's an amalgamated CapEx intensity across both. And so, it's important for me to point that particular factor out given what we will have done on the expansion of our 5G and fiber footprint but it includes those prospective costs that you've alluded to. Zainul?

Thanks Darren. Yes. So, I think what's important to highlight there as Darren talked to the capital investment supports both lines of business and as we've talked about as well, we're going to advance our copper to fiber migration activities. And within that that gives us the opportunity to add incremental products and services which to your point, includes smart home security and automation. It includes consumer health. We've launched a line of online security protection for our customers across their devices and their identity including dark web monitoring and it will open us up for a number of new revenue opportunities. But I wanted to double-click a little bit as well on the cost efficiency side of the business. And our digitization program combined with our accelerated capital rollout is going to enable a number of opportunities and I'll add a bit of color in terms of how to think about it. First off, we have do-it-yourself capabilities that will be enabled as we move our customers to more of a digitized infrastructure. The second is that our data and analytics capabilities are going to give us channel synergies and loading synergies from a perspective of adding incremental product intensity and increasing the level of engagement with our products. So, can we be at the forefront of the customers understanding how they activate services in their home? And can we provide value in terms of their automation services and increase their level of engagement with our services leveraging data and analytics? We can also leverage the same data and analytics to deliver self-correcting behaviors and get ahead of the assurance cycle, so that our customers don't have to reactively reach out to us, but we can proactively identify issues whether they’d be buffering or other service impacting issues and we can correct those in advance. And finally, the open ecosystems that we will be deploying our services across enable us to offer new RGUs. So, working with our TI partners, we're advancing our platforms in home and those will enable us to add new products and services, and we'll be able with our DIY infrastructure to also create premium services for installation repair and maintenance. So we have a number of opportunities to advance and accrete the margins from a revenue enhancement as well as a cost efficiency perspective.

And on wireless I just want to top-up quickly. We've been having great success on both subscriber growth and underlying ARPU management and we see the capital investments helping us accelerate that in a number of ways. One continuing the trend we're on consistent high quality new customer acquisition. We're seeing a really healthy mix to unlimited and premium and the investments in 5G are only going to accelerate that. And we've been able to really be productive on our base management in terms of driving product intensity and great churn outcomes, but also driving good underlying revenue trends. So able to drive step-ups and drive multi-line and product intensity and these investments are going to help us accelerate that. And I think lastly, this only helps us get even better with our digital channel execution our data-driven marketing and simplifying the journeys for our customers, which is so critical to our success.

Thank you. Mike, we have time for one more question please.

Yes. The last question comes from Simon Flannery from Morgan Stanley. Please go ahead.

Thank you for fitting me in. Darren, I wonder if you could just talk about your expectations for the regulatory and competitive environment following the -- excuse me, the MVNO decision, what impact do you think that's going to have on your business and some of the other actions that are being taken? And then, on the roaming revenue, we're seeing potentially changes in business travel trends over time. Did you think it's reasonable that a couple of years from now the industry is going to see roaming revenues back to prior levels, or do you think we're going to see some portion of that come back but not all of it? Thanks.

Thanks, Simon. For the last 21 years, I think we've done a pretty good job as an organization, navigating through a continuum of exogenous events, many of them regulatory decisions. And I would say the MVNO decision is frankly no different. We will again work our way through it. It's a long decision with a lot of complexities inherent within it. And we're still reviewing it, and we'll continue to do so in the days and weeks ahead, working with the regulators in that regard. I would say, on the positive side, it's a constrained MVNO or a limited MVNO, in the sense that it's not broad-based. It appears to be somewhat aligned, not the line is what I would like or what I think would be appropriate, but it seems to be somewhat aligned with consistent facilities-based policy coming out of our regulator. And I think our regulator is recognizing that the regulatory policy of facilities-based competition drives the right outcomes for Canadians. And they don't have to look very far for an empirical proof point of that. They can look at how our networks have performed during the pandemic and how we have supported Canadians working from home, learning from home, accessing health care from home or virtually staying connected with friends and family, which of course is extremely important from a mental health point of view. And I think our networks, in Canada, have performed at a level that is best-in-class on a global basis. And certainly, I think the penny has dropped that quality matters when it comes to network coverage, network performance, particularly speed and latency and network reliability in that regard. I think it's important to note that only regional carriers our -- will have the ability and obligation to hold spectrum assets are…

Thank you. And any thoughts on roaming?

I think on the roaming, on that front Simon, you can expect us to return to plan in that regard. I don't expect it, if I understand your question correctly to be degraded. Prospectively, I would expect the recovery to be 100% in that regard. And I think there's lots of other roaming opportunities for this organization as it relates to IoT that we can leverage prospectively within the voluminous data environment.

Thanks a lot.

Thank you, Simon. Thank you, Darren. And thank you everyone for taking the time to join us today. Please feel free to reach out to the IR team with any follow-ups and take care everyone.

Ladies and gentlemen, this concludes the TELUS 2021 Q1 earnings conference call. Thank you for your participation and have a nice day.