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Canadian telecommunications industry

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Presentation on theme: "Canadian telecommunications industry"— Presentation transcript:

1 Canadian telecommunications industry
Presented by : Gary Li Vincent Minichiello Amy Ng Dickson Tan

2 Agenda Industry Analysis Manitoba Telecom Services (TSE:MBT)
Telus Corporation (TSE:T) Rogers Communications Inc. (TSE:RCI.B)

3 What is telecommunication dfttttetttetteltelecommunication
Communication over a distance by cable, telegraph, telephone, or broadcasting. -Oxford Dictionary Sender Medium Receiver

4 Key Terms Average Revenue Per User (ARPU)
Total Revenue divided by # of subscribers measure used primarily by consumer communications and networking companies, it is the total revenue divided by the number of subscribers. Compound Annual Growth Rate (CAGR) The year-over-year growth rate of an investment over a specified period of time.

5 History The first conventional telephone developed by Alexander Bell Smoke signals and drums Introduction of the television The first cellphone The first telegraph bySir Charles Wheatstone and Sir William Fothergill Cooke The ARPANET was developed The first radio station

6 Segmentation Internet Access Fixed Line Telecommunications Media
-The Internet access market consists of the total revenues generated by Internet Service Providers from the provision of narrowband and broadband Internet connections through both consumer and corporate channels. -The fixed-line telecommunications market is valued as the revenues obtained by operators for voice telephony and other non-voice information transmission using fixed lines, rather than wireless systems. -Media is primarily television and radio broadcasting. -The wireless telecommunications services market is defined here as including cellular phones, pagers and any other wireless or cellular telecommunication service. Media Wireless Telecommunications

7 Internet Market Volume
-The Canadian internet access market has exhibited strong growth over the previous five years, but will begin to slow in its growth towards 2013 as internet access penetration approaches saturation. -The Canadian internet access market generated total revenues of $4.5 billion in 2008, representing a compound annual growth rate of 9.4% for the period spanning

8 Number of Internet Subscribers
-The number of internet subscribers increased with a CAGR of 8.3% between , to reach a total of 10.2 million in The number of subscribers is expected to rise to 11.7 million by the end of 2013, representing a CAGR of 2.7% for the period. -The performance of the market is forecast to decelerate, with an anticipated CAGR of 2.7% for the five-year period , which is expected to drive the market to a value of $5.1 billion by the end of 2013

9 Competitive Landscape
Internet Competitive Landscape Buyers have low switching costs Strong supplier power Potential entrants attracted to market growth Buyers in this market have fairly low switching costs, which strengthens their power to an extent. Switching costs are moderate, and can include the time required to leave one contract and move to a competing contract, or cancellation fees. In practice, customers are prone to changing ISPs in order to gain better value for money. Brand reputation can play an important role in this market.However, buyer power is prevented from becoming more than moderate by the vast amount of potential customers available to market players, and the importance of the service being offered to consumers. This market is characterized by strong supplier power, with the cost of switching for market players and the importance of quality contributing to this. Potential entrants to this market are likely to be attracted by the dynamic market growth in recent years.

10 Forecasted Market Volume
Internet Forecasted Market Volume

11 Forecasted Number of Internet Subscribers

12 Wireless Market Volume
The Canadian wireless telecommunication services market generated total revenues of $12.8 billion in 2008, representing a compound annual growth rate of 8.8% for the period spanning

13 Number of Wireless Subscribers
Market consumption volumes increased with a CAGR of 9.4% between , to reach a total of 21.5 million subscribers in The market’’s volume is expected to rise to 28.4 million subscribers by the end of 2013, representing a CAGR of 5.8% for the period. The performance of the market is forecast to decelerate, with an anticipated CAGR of 6% for the five-year period , which is expected to drive the market to a value of $17 billion by the end of 2013.

14 Competitive Landscape
Wireless Competitive Landscape National governments are the sole suppliers of bandwidth Large number of buyers Switching costs vary National governments, in the form of regulatory authorities, are the sole suppliers of bandwidth and licenses are allocated through periodic auctions or 'beauty contests. Entering the market as a facilities-based provider requires significant capital outlay. The wireless telecommunications market has a sheer number of buyers, both individual as well as corporate. This fact tends to weaken buyer power as players can offer their products and services to many potential customers and do not need to compete so intensely on price.Cell phone services are highly popular, and may be vital for some users, constituting the main communication channels, which weakens buyer power Switching costs vary from country to country, and include the difficulty of leaving a long-term service contract early, and the cost of unlocking a locked SIM card. They are usually lower for prepaid phone customers. Customer brand loyalty is generally expected to be low, which boosts buyer power considerably.

15 Forecasted Market Volume
Wireless Forecasted Market Volume

16 Forecasted Number of Wireless Subscribers

17 Wireline Market Volume
The Canadian fixed line telecoms market generated total revenues of $18.9 billion in 2007, representing a compound annual growth rate of 0.1% for the period spanning Voice only telecoms sales proved the most lucrative for the Canadian fixed line telecoms market in 2007, generating total revenues of $11.8 billion, equivalent to 62.6% of the market's overall value.

18 Number of Wireline Subscribers
Market consumption volumes increased with a CAGR of 1.2% between , to reach a total of 20.9 million of fixed-line phones in 2007.

19 Competitive Landscape
Wireline Competitive Landscape Slow growth High threat of substitutes Buyer power is limited Low switching costs The Canadian market has showed sluggish growth in market revenues for the period spanning after contracting periods of which affect the competitive landscape of the market. Buyer power is limited in the fixed lines telecom market due mainly to a high number of consumer and business customers, and the increasing range of products and services available. However, the importance of a fixed line (especially to consumers) is diminishing as other more convenient methods of communication become available. The threat of substitutes for fixed line telecoms is high and still increasing, especially from mobile phones and the ever growing voice over internet protocol (VoIP) applications, which offer viable and affordable alternatives for consumers.

20 Forecasted Market Volume
Wireline Forecasted Market Volume The compound annual growth rate of the market in the period is predicted to be 0.7%

21 Forecasted Number of Wireline Subscribers
The compound annual growth rate of the market volume in the period is predicted to be 0.3%

22 Technology AnalogVariable signal continuous in both time and amplitudeAffected by “noise”, which can cause data loss DigitalUses discrete values represented by binary numbersLess likely to have data loss

23 Technology Spectrum Licensing
Is a radio frequency that is subject to usage limitations Regulated by the government Extremely expensive (up to $1billion) The radio frequency (RF) electromagnetic spectrum is an aspect of the physical world which, like land, water, and air, is subject to usage limitations. Use of radio frequency bands of the electromagnetic spectrum is regulated by the government in a Spectrum management process known as frequency allocation or spectrum allocation.

24 Technology Code Division Multiple Access (CDMA)
Channel access method utilized by various radio communication technologies channel access method utilized by various radio communication technologies.One of the basic concepts in data communication is the idea of allowing several transmitters to send information simultaneously over a single communication channel. This allows several users to share a bandwidth of different frequencies. GSM differs from its predecessors in that both signaling and speech channels are digital, and thus is considered a second generation (2G) mobile phone system. This has also meant that data communication was easy to build into the system. GSM also pioneered a low-cost (to the network carrier) alternative to voice calls, the short message service (SMS, also called "text messaging"), which is now supported on other mobile standards as well. Global System for Mobile Communications (GSM) Most popular standard for mobile phones in the world. Pioneered SMS

25 Technology International Mobile Telecommunications-2000 (3G)
Allows simultaneous use of speech and data service Higher data rates Enormous costs of additional spectrum liscening 3G allows simultaneous use of speech and data services and higher data rates. Thus, 3G networks enable network operators to offer users a wider range of more advanced services while achieving greater network capacity through improved spectral efficiency.Roll-out of 3G networks was delayed in some countries by the enormous costs of additional spectrum licensing fees. In many countries, 3G networks do not use the same radio frequencies as 2G, so mobile operators must build entirely new networks and license entirely new frequencies. Telus first introduced 3G services in Canada in HSDPA is an enhanced 3G (third generation) mobile telephony communications protocol. Rogers Wireless deployed HSDPA system 850/1900 in Canada on April 1, In July of 2008, Bell Canada and Telus announced a joint plan to expand their current shared EVDO/CDMA network to include HSDPA. During 2007, an increasing number of telcos worldwide began selling HSDPA USB modems as mobile broadband connections. High Speed Download Packet Access (HSDPA) Enhanced 3G network Higher data transfer speeds Began selling HSDPA USB modems

26 Technology 4G LTE - No specific definition yet High network capacity
A nominal data rate of 100 Mbit/s High quality of service for next generation multimedia support Involves major changes in hardware All Canadian companies have announced to introduce the 4G network, but with no specific deadline. 5G - No specific definition yet Introduced in Korea in 2012 Unknown speed and service Claim to be super high-speed

27 Regulatory Environment
Industry Canada Canadian Radio-television and Telecommunications Commission Competition Bureau Industry Canada Responsible for communications policy and spectrum frequency allocation. Responsibility for providing certification and type-approval of telecommunications equipment in Canada. Regulates and supervises broadcasting and telecommunications in Canada. Oversees and enforces decisions relating to the terms, conditions and tariffs associated with the interconnection of facilities among telecommunications carriers and service providers. Acts as a “watchdog” for conspiracies to fix prices and price maintenance. Authority over the approval of mergers. Deal cases involved with misleading advertising and exclusive dealing. Industry Canada is Responsible for communications policy and spectrum frequency allocation. It also has the Responsibility for providing certification and type-approval of telecommunications equipment in Canada. The Canadian radio-televisions and telecommunications commission regulates and supervises broadcasting and telecommunications in Canada. It also oversees and enforces decisions relating to the terms, conditions and tariffs associated with the interconnection of facilities among telecommunications carriers and service providers The Competition Bureau relates to the telecommunication industry by acting as a watchdog for conspiracies to fix prices and price maintenance. They also have the authority over the approval of mergers and deal with cases that are involved with misleading advertising and exclusive dealing.

28

29 Bringing Your World Together
Rogers Communications is one of the Canada’s largest communications companies, particularly in the field of wireless communications and cable television, with additional telecommunication and mass media assets Innovation in Communications, Information and Entertainment

30 this is the price summary of Rogers Communications as of today Nov 12, $31.75 per share, 77 cents increase from yesterday’s price. Market Capitalization is 19billion, which is relatively large compared to TELUS and MTS. Annual Dividend is 1.16 and its Yield is 3.7, based on these numbers, I would say that Rogers is a relatively safe stock compares to others in the same industry.

31 RCi-b 10 year this is the 10 years chart. As we can see, Rogers did not issue dividend in a regular basis as TELUS and MTS did. Looking at it stock price, it has its lowest at $4.36 per share in October 2002, and its highest at $51.18 per share in July Coming back down to around $30ish in 2009.

32 RCi-b 5 year This is the 5 year chart, so we can see the trend more clearly.

33 RCi-b 1 year This is the 1 year chart, as I mentioned, the stock prices for Rogers in 2009 are around $30, and it had paid 3 dividends in the year of 2009.

34 Rogers Agenda HistoryBusiness Segment Rogers Wireless Rogers Cable
Rogers MediaManagementPerformanceRecommendation my agenda today is to go over the history of Rogers Communications, its different segments: Rogers Wireless, Rogers Cable and Rogers Media. Then I will talk about its management terms, its performances by analyzing its financial statement, and finally the recommendation whether to buy, hold or sell its shares.

35 History E.S. Rogers Sr. HISTORY
1928-Rogers Batteryless Radios merged with Majestic Electric Radios, a leading radio manufacturer in Chicago in 1928. 1913- Ted Rogers was able to pick up a report of a ship wreck in Ireland while using his telegraph set 1925- The Alternating Current Tube system schematics, hand-drawn by Ted Rogers Sr. for his Patent application. The Company began with Edward S. Rogers Sr., one of the most important radio experimenters. In 1925, Rogers Sr. invented the world’s first AC radio tube; this was a dramatic breakthrough in technology and became the key factor in popularizing radio reception. In 1931, Rogers Sr. was awarded on experimental television licence in Canada. He passed away suddenly in 1939 at the young age of 38. 1921- He is the first amateur wireless operator in Canada to send a signal across the ocean. 1927-CFRB stands as the first all-electric radio station in the world, its transmitters being powered by Rogers A/C Tubes. The call-letters represent Canada's First Rogers Batteryless. 1939-Ted Rogers Sr. passed away suddenly in The employees at Rogers-Majestic and CFRB were touched deeply by this profound tragedy. HISTORY

36 History E.S. “Ted” rogers
1967- Ted Rogers founds Rogers Cable TV, acquires Bramalea Telecable and formally enters into the cable business with 300 subscribers. 1960- While in law school, Ted Rogers buys CHFI, a struggling FM radio station and builds it into a success. this is Edward S. “Ted” Rogers, he was only 5 at the time of his father’s death. In the 1960s, Ted Rogers started Rogers Radio Broadcasting Limited. Rogers’ interest in radio led him to cable television in the mid 1960s. In the 1970s, Rogers Cable Television had become Canada's most innovative cable company. 1973- Rogers Cable TV launches ‘cable tv converters’ in Toronto, providing its subscribers with more channels. 1962- CHFI-AM is launched later renamed CFTR, signifying ‘Canada’s First Ted Rogers’, now 680 News. 1969- Rogers Community Television premieres. 1979- Rogers becomes a public company when it acquires Canadian Cablesystems through a reverse takeover and becomes biggest cable company in Canada HISTORY

37 History E.S. “Ted” rogers
1988- Rogers Video is created and later becomes the largest Canadian-owned chain of rental video stores. Rogers Broadcasting acquires the Canadian Home Shopping Network, later renamed The Shopping Channel. In 1980, Rogers purchased Premier Communications Limited, which almost doubled Rogers’ cable subscribers and made Rogers the largest cable television company in Canada. In 1985, Rogers entered the mobile phone market. Rogers Cantel Mobile Communication INC., which is now called Rogers Wireless, is now owned by Rogers Communication. 1985- Cantel (predecessor of Rogers Wireless) launches cellular service on July 1. 1980- Rogers acquires Premier Cablevision of Vancouver. 1981- Rogers starts to operate in U.S. cable market. Wins franchises in Orange County, California, Minneapolis, and Portland and purchases the cable system in San Antonio 1986- Rogers Communications Inc. is formed as the parent company to his operating divisions. Rogers Broadcasting acquires CFMT - Toronto. 1989- Rogers sells U.S. cable assets for over $1 billion profit and invests profits in wireless sector. HISTORY

38 History E.S. “Ted” rogers
1991- Rogers Cablesystems and partners launch Viewer’s Choice Canada, a pay-per-view cable television company. 1994- Rogers launches $3.1 billion hostile bid for Maclean Hunter, at the time the largest takeover in Canadian history – Rogers Media is created. In 1994, Rogers Media is created. In 1995, Rogers becomes the first cable company in North America to launch commercial high-speed Internet service. In 1997, Rogers Cantel AT&T launches prepaid Pay-As-You-Go cellular service. 1997- Rogers Cantel AT&T launches prepaid Pay-As-You-Go cellular service. 1993- Rogers Broadcasting station CFTR changes its format and becomes 680News, the first all-news station in Canada. 1995- Rogers pulls out of Unitel. Rogers becomes the first cable company in North America to launch commercial high-speed Internet service when it launches service in Newmarket, Ontario. 1999- Rogers Cablesystems launches Digital Cable Television service – offering more channels and enhanced services to subscribers. Microsoft, AT&T and British Telecom invest in Rogers HISTORY

39 History E.S. “Ted” rogers
2002- Rogers launches GSM wireless network Rogers Cable launches Video On Demand. CFMT-TV rebranded as Omni Television. 2004- Rogers Communications Inc. acquires the SkyDome stadium in Toronto. Rogers buys back AT&T's interest in Rogers Wireless 2006- Rogers Cable launches the Rogers Yahoo! Rogers Media launches “Hello!” magazine Rogers Cable launched Digital Television into Canadian homes in In December 2004, Rogers Communications repurchased the shares of Rogers Wireless that were publicly held and proceeded to take the company private which significantly enhanced the company's operating and financial flexibility. 2000- Rogers acquires the Toronto Blue Jays major league baseball team. 2001- Rogers Media acquires control of Sportsnet from CTV. Renamed Rogers Sportsnet 2003- Rogers Cable launches Personal Video Recorders (PVRs) 2005- Rogers Cable acquires Call-Net and offers local telephone service. HISTORY

40 History E.S. “Ted” rogers
On December 2, 2008, Edward S. Rogers died of heart failure. (Following the death of Ted Rogers, control of Rogers Communications passed to the Rogers Control Trust, a trust for which a subsidiary of Scotiabank serves as trustee. The trust exercises control of the company for the benefit of current and future generations of the Rogers family. Ted's son Edward Rogers III and daughter Melinda Rogers serve, respectively, as chair and vice-chair of the trust.). And appointed Nadir Mohammed as CEO, which I will talk about him in the management section. 2007- Rogers acquires five Citytv television stations Rogers achieves investment grade status for its debt. 2009- Nadir Mohamed becomes President & CEO of Rogers Communications Inc. 2008- Rogers Wireless launches the Apple iPhone. The Buffalo Bills NFL Football Team, in partnership with Rogers Communications, kick off their “Toronto Series” with a pre-season game at Rogers Centre against the Pittsburgh Steelers. Bills win, 24 to 21. Ted Rogers passes away at his home, from congestive heart failure. Alan Horn becomes Acting CEO of Rogers Communications Inc., as well as retaining Chairman duties. HISTORY

41 Rogers Communications
Business Segments Rogers Communications Rogers Communications divided into 3 segments, Rogers Wireless, Rogers Cable, and Rogers Media. We will go over them one by one. Rogers Wireless Rogers Cable Rogers Media BUSINESS SEGMENTS

42 Rogers Wireless Canada’s largest wireless provider8.2 M wireless voice & data subs37% national market share at 2Q09Most reliable & fastest networksUnmatched distribution channel with two strong brands in marketFirst national GSM/HSPA carrier brings roaming & device advantage First Canadian carrier to carry the Apple iPhone 3G and 3GS in CanadaBlackBerry Bold and the BlackBerry CurveFirst Google Android-powered devices in Canada.HSPA+ Rocket Stick Rogers Wireless provides wireless voice and data communications services across Canada to nearly 8.2 million customers under both the Rogers Wireless and Fido brands. Proven to operate Canada’s most reliable and fastest wireless networks, and the first carrier operating on the global standard GSM and highly advanced 3G HSPA technology platforms. Rogers wireless is Canada’s leader in innovative wireless voice and data services, and provides customers with the best and latest wireless devices and applications, like iphone, blackberry, HSPA+ rocket stick, and many more. BUSINESS SEGMENTS

43 Rogers Wireless Profit: Operating Expenses: Operating Revenue:
Post paid (voice and data)Prepaid (voice and data)One way messagingEquipment salesNetwork revenue and Data Revenue Operating Expenses: Cost of equipment salesSales and marketing expensesOperating, general and administrative expenses In the wireless operating revenue, there are Post paid, Prepaid, One way messaging, Equipment sale, Network revenue and Data revenue. In the operating expenses, there are Cost of equipment sales, Sales and marketing expenses, Operating, general and administrative expenses. From here, we can look at the life time revenue per subscriber, wireless postpaid and prepaid subscribers, wireless network revenue, wireless data revenue, we can see that Rogers has increasing number of subscribers, and increasing revenues from previous years, and thus, increasing adjusted operating profits. Profit:

44 Rogers Cable Canada largest cable television service providerHigh-Speed Internet Digital TVRogers on DemandHome Phone Rogers Cable is Canada’s largest cable services. Its advanced digital two-way hybrid fibre-coax network provides the leading selection of on-demand and high-definition programming including an extensive line-up of sports and multicultural programming. Rogers Cable pioneered high-speed Internet access and now 68% of its cable customers subscribe to its high-speed Internet service, while Rogers Cable boasts 1.3 million residential and business telephony subscribers. Rogers Cable also operates a retail distribution chain which offers Rogers branded cable, home entertainment and wireless products and services. TV 475 channels in Toronto market & growing • Pioneer of digital simulcasting • 80 multicultural channels plus on- demand • 72 HD channels & more to come • Most sports, ethnic and movies • Rogers on DemandVOD & SVOD Timeshifting PVR’s Rogers on demand Available to over 97% of digital cable homes On-demand library now exceeds 5,000 titles Studio agreements cover 85% of Hollywood output & growing Many release dates same as video stores Subscription VOD for Movie Network, WWE, Treehouse, National Geographic, NFL, Howard Stern, HGTV, & Food Network Rich library of movies, children’s, documentaries & adult Prime-time episodic content (24, 30 Rock, Mad Men, AMC, Global, Citytv, CTV, E!, MTV) Array of free content including karaoke, concerts, short films & TV specials Internet Most SpeedUp to 50Mbps • Most ChoiceSix speeds (Ultimate, Extreme+, Extreme, Express, Lite, Ultra Lite) • Most ServicesPremium offering with content, control & protection from Yahoo! • Usage AllowancesAllows customers to pay for additional usage above allowance Rogers home phone 878K voice-over-cable lines at 6/30/09, in addition to 165K residential circuit- switched lines (total residential lines 1.0M) Fully-featured with back-up power, number portability, 411/911, call waiting, caller ID & voice mail Connects with existing home wiring & alarm systems & integrates Rogers Wireless products Cable telephony now available in 95% of Rogers Cable territory Bundled with Rogers’ cable, Internet, & wireless services on a single bill Robust small BUSINESS SEGMENTS

45 Rogers Cable Profit: Operating Expenses: Operating Revenue:
Analog cable serviceDigital cable service revenueInternetRogers Home PhoneRBDRogers Retail Operating Expenses: Sales and marketing expensesOperating, general and administrative expensesCost of Rogers Retail sales Rogers cable’s operating Revenue included, Analog cable service, Digital cable service revenue, Internet ,Rogers Home Phone, RBD, Rogers Retail. Operating Expenses included, Sales and marketing expenses, Operating, general and administrative expenses, Cost of Rogers Retail sales. Increasing numbers in high definition households, cable internet subscribers, home phone cable telephony subscribers from previous years, lead to increased in adjusted operating profit. Profit:

46 Rogers MEdia Portfolio of category-leading media assets Radio and television broadcastingPublishingSports entertainmentOnline properties Rogers Media is Canada’s premier combination of category-leading radio and television broadcasting, publishing, sports entertainment and on-line properties. Its Radio group operates 52 radio stations across Canada. Produces 70 well-known consumer magazines and trade and professional publications. Media’s Sports Entertainment assets include the Toronto Blue Jays Baseball Club and Rogers Centre, Canada’s largest sports and entertainment facility. BUSINESS SEGMENTS

47 Rogers Media Profit: Operating Revenue: Operating Expenses:
Advertising revenuesCirculation revenuesSubscription revenuesRetail product revenuesSales of ticket, receipts, of league revenue sharing and concession sales associated with Rogers Sports Entertainment Operating Expenses: Cost of salesOperating, general and administrative expenses Rogers Media’s revenues included, Advertising revenues, Circulation revenues, Subscription revenues, Retail product sales, sales of ticket, receipts, of league revenue sharing and concession sales associated with Rogers Sports Entertainment. Expenses included, cost of sales, and Operating, general and administrative expenses. As we can see, the revenue had increased in 2008, however, the profit decreased, primarily because of the revenue and expense changes and overall is reflective of the challenging economic conditions and the resultant declines in advertising and retail sales activity. Profit:

48 Management MANAGEMENT
They are all smart people in the company, in particularly I want to talk about Nadir Mohamed. In 2001, he was named President and CEO of Rogers Wireless. Under his leadership, Rogers Wireless experienced 13 consecutive quarters of double digit network revenue growth, 14 consecutive quarters of double digit operating profit growth, and improved free cash flow from in excess of negative $800 million in 2001 to over $270 million positive in In addition, he led Rogers Wireless through the acquisition of Microcell Telecommunications in 2004, making Rogers Wireless the largest wireless carrier in Canada, that today has approximately 8 million customers from coast to coast. In March 2009, he was appointed President and CEO of Rogers Communications Inc., after the death of Ted Rogers. MANAGEMENT

49 Financial Statement

50

51

52

53 RCi-b 5 year This is the 5 year chart, so we can see the trend more clearly.

54 RCi-b 1 year This is the 1 year chart, as I mentioned, the stock prices for Rogers in 2009 are around $30, and it had paid 3 dividends in the year of 2009.

55 Buy

56 The Future is Friendly

57 T 10 Year

58 T 5 Year

59 T 1 Year

60 Telus Agenda HistoryList of AssetsStructureWirelessWi redManagementPerforman ceRecommendation

61 1995- Consumer Internet service is launched.
History 1990- TELUS Corporation established, following the reorganization of the Alberta Government Telephones Commission, becoming the parent company of AGT. The sale of TELUS shares marked the largest initial public offering in Canadian history up to this time, raising $896 million. 1991- The Province of Alberta sold its remaining ownership interest in TELUS for $870 million. 1995- Consumer Internet service is launched. 1990- Edmonton Telephones Corporation (ED TEL) established as an arms-length subsidiary company of the City of Edmonton. 1995- TELUS acquired ED TEL from the City of Edmonton for $467 million. 1996- The TELUS "master brand" introduced, bringing products and companies under one unified identity. The ED TEL and AGT brands are retired. HISTORY

62 History 2001- TELUS acquires Arqana Technologies Inc, Daedalian Solutions Inc, PSINet's Canadian operations and facilities, QuebecTel, Columbus Group, Williams Communication Canada, Northwest Digital (NWD) Systems Inc. 2005- TELUS integrates its wireline and wireless segments of the business – TELUS Communications and TELUS Mobility – into one operating structure. 1998- TELUS Corporation and BC TELECOM announce a proposed merger. This is the first step toward creating a leading national telecommunications company. 2008- TELUS completes acquisition of Emergis. 2006- TELUS acquires Assurent Secure Technologies.TELUS completes the restructuring of TELUS Communications and TELUS Mobility. 2000- TELUS acquires wireless company Clearnet. 2004- TELUS acquires ADCOM, Inc. HISTORY

63 Business Segments Telus Telus Wireless Telus Wireline BUSINESS

64 BUSINESS SEGMENTS

65 Telus Wireless BUSINESS SEGMENTS

66 Telus Wireless BUSINESS SEGMENTS

67 Telus Wireless Risks BUSINESS SEGMENTS

68 Telus Wireline BUSINESS SEGMENTS

69 Telus Wireline Risks BUSINESS SEGMENTS

70 Management How Telus is Organized: MANAGEMENT

71 Management MANAGEMENT

72 Management MANAGEMENT

73 Financial Statements

74

75

76

77

78 FOCUSED, RESPONSIVE & LEAN
Build momentum from a leadership position We occupy a unique competitive position in Canada. As a national provider, we are building on our existing strengths as the one-stop provider of clear choice to the Manitoba household and consumer, and an established leader in enterprise markets nationally. Improve operational efficiency By the end of 2006, we had exceeded a two-year cost reduction target of $100 million, with another $40 - $50 million in cost reductions targeted for These achieved and planned cost reductions improve our operating efficiencies to help us succeed in a very competitive industry. Lead in technology innovation We have a long track record of services innovation in all our markets. In our Enterprise Solutions division, we were the first Canadian provider to launch IP Trunking, network resident IP telephony solutions, and dynamic class of service for multi protocol switching (MPLS) network. In consumer markets, we were the first Canadian telco to launch High Definition Television with our digital TV offering, recognized as a leading telco TV service in North America. Drive the transition from legacy to growth service As customer demand changes, we are driving the transition of our business from so-called legacy services to growth services that we expect will deliver 40% of revenues by the end of 2007, compared to 29% in Growth services include consumer market offerings in high-speed Internet, next generation wireless and digital. In our Enterprise Solutions division, we are pursuing growth in converged IP services and unified communications. “To deliver true value as seen through the eyes of our customers”

79

80 MBT 10 year

81 MBT 5 year

82 MBT 1 year

83 MTS Agenda HistoryBusiness SegmentsManagementPerformanceRecommendation

84 History Acquired Allstream and become the 3rd largest telecom provider in Canada Became a public traded company on the TSX Initiated broadband service in Manitoba 1997 Manitoba Telecom Service became a public traded company Before crown corporation, sold by provincial government of Manitoba 1999 Strategic alliance with Bell partnered with Bell Canada to form Intrigna, which was a company created to expand telecommunications options for the business market in Alberta and British Columbia. As part of the deal, Bell Canada gained 20% ownership of MTS. They set up a jointly operated office in Calgary. By the summer of 1999, fibre optic cable had been laid in Edmonton and Calgary, and later extended to Vancouver. Intrigna was renamed Bell West.[7] 2000 Initiate broadband service in Manitoba 2004 End strategic alliance with Bell in Western Canada 2004 Acquired Allstream ($1.6 billion) and become the 3rd largest national telecom provider in Canada  Formed Strategic alliance with Bell 2004 - Ended strategic alliance with Bell in Western Canada•2004 -  Acquired Allstream and become the 3rd largest telecom provider in Canada. HISTORY

85 History 2004 –Became strategic alliance with BT: broaden IP based technology service Pierre Blouin became CEO (Former BCE executive) 2006 -  Introduced high definition TV service 2004 MTS Allstream strategic alliance with BT: broaden its IP based technology service globally 2005 MTS Allstream acquired Delphi Solutions Corp. 2005 Pierre Blouin named new Chief Executive Officer of Manitoba Telecom Services Inc. and MTS Allstream Inc. (Former BCE executive) 2006 $320 million share repurchase 2006 Introduced high definition tv serivce 2008 Manitoba’s Top Employers by Winnipeg Free Press 2005 - Acquired Delphi Solutions Corp. 2008 -  Manitoba’s Top Employers by Winnipeg Free Press 2006 – Spent $320 million share repurchase HISTORY


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