Annual report - About TELUS

management discussion and analysis
Capture an increasing share of the fast-growing high-speed
Internet access services, Web portal and content business and
e-commerce applications
TELUS achieved its goal of more than tripling its highspeed
Internet base on ADSL technology by reaching
81,000 subscribers in the West. TELUS and other telcos
are closing the gap on the cable-TV companies in the
share of high-speed Internet subscribers.
TELUS Web portals were launched during the year
in Alberta (Alberta.com) and Toronto (MyTO.com) using
our unique local content and partnership approach. As a
result, monthly page views and unique visits more than
doubled to 49 million and 1.7 million respectively, putting
our Web sites into the top three among Canadian-owned
sites. Several new e-commerce initiatives were launched
including Internet-based fax services, EPOST business
mail and an ASP alliance with HP Canada. As a result,
basic, enhanced and managed data and Internet revenues
in 2000 increased by 10% overall and in the Internet
segment revenue was 52% higher.
Source: Credit Suisse First Boston
Capture a larger share of the fast-growing wireless prepaid
segment, increase TELUS Mobility’s digital subscriber/wireless
customer base and introduce new wireless data and Internet
services as a basis for creating future revenue growth at
TELUS Mobility
TELUS Mobility significantly increased its prepaid base in
the West during the year through increased marketing.
Clearnet launched a digital prepaid service, Pay & Talk, in
> 52
HIGH-SPEED INTERNET
SUBSCRIBERS – CANADA
(000s)
938
486
94
99 00
392
Cable-TV Telcos TELUS
August and by year-end the combined TELUS Mobility
had 192,700 prepaid subscribers. Pay & Talk was also
notable in being the first prepaid service which was
Web/Internet ready. TELUS Mobility also launched wireless
Internet services during the year branded i-Web,
Surf and Surf-A-Lot. Through partnerships with numerous
infrastructure and content providers, customers are
offered a wide variety of services such as news and
information, stock quotes, directories, games, and banking
and financial transaction services. Wireless Internet
services were made available on prepaid offerings that
appeal to the youth market, which also tends to more
readily adopt new wireless and data services.
In July, TELUS Mobility committed to an accelerated
digital network build in the West and a program to
migrate higher value customers onto the latest digital
handsets. Including the subscribers of Clearnet and
QuébecTel Mobilité at the end of 2000, digital subscribers
comprised 57% of total wireless subscribers.
Achieve the financial earnings targets as outlined
The TELUS 1999 annual report outlined targeted ranges
for earnings per share, revenue growth, merger cost
savings, EBITDA, operating cash flow growth, and
capital spending. Certain measures were adjusted in
July and October because of the purchase of QuébecTel
and Clearnet. While they negatively impacted earnings,
cash flow and increased capital expenditures, these
transactions were important for the enhancement of
future revenue and earnings growth potential. It is
notable that, excluding the impact of the Clearnet
and QuébecTel acquisitions, TELUS would have met
or exceeded stated 2000 original guidance.
Original Adjusted
Guidance Guidance Actual
Earnings per share $2.47 to $2.57 $1.85 to $1.95 $2.12*
Cash EPS1 – $2.05 to $2.15 $2.31
Revenue growth 2 to 3% 8 to 9% 9.6%
EBITDA growth 4 to 6% 4 to 6% 5.9%
Operating Cash Flow Approx. 10% – 4.0%
Merger Cost Savings2 $160 to $180 mil. Same $199 mil.
Capital Expenditures $1.3 bil. $1.5 bil. $1.44 bil.
1 Earnings per share before amortization of intangible assets, restructuring
costs net of tax, revaluation of future tax assets, and goodwill amortization.
2 Cumulative savings for 1999 and 2000.
* normalized for non-cash future tax asset revaluation of 27 cents.