Annual report - About TELUS

prices. Accordingly, there can be no assurance that
TELUS can fully complete its $2.0 to $2.2 billion capital
program in 2001, make additional acquisitions, or maintain
current dividend levels.
Dividend
Current dividend levels may be inconsistent with the growth
strategy of TELUS
The debt of TELUS is currently rated investment grade and
TELUS plans to maintain this status. The business plan
of TELUS contemplates increased capital expenditures in
the growth areas of wireless, data and IP as well as to
expand on a national basis. However, the extent of any
future growth in operating cash flow may be constrained,
among other reasons, by the flexibility of TELUS to fund
attractive growth opportunities given the non-tax deductible
nature and amount of current dividends relative to the
objective of maintaining an investment grade credit rating.
Also, future revenue and cash flow growth targets may
not be achieved, reducing the financial flexibility to maintain
the current dividend level. The dividend payout on shares
of high growth acquisition targets (such as Clearnet in
2000) is likely significantly less than that of TELUS and
may be zero. Accordingly, a continued acquisition program
involving share consideration may be inconsistent with
maintaining current dividend levels. TELUS reviews its
dividend policy quarterly and while there is no current
plan to change the dividend payout, there can be no
assurance that a future change will not be implemented,
and it is difficult to predict what effect this may have on
the price of TELUS shares.
Human Resources
The shortage of skilled employees is a challenge for all
communications companies and TELUS is in the midst of
negotiations with its union
Shortage of telecommunications talent in the industry
The ability to attract and retain talented employees is critical
to the success of TELUS in meeting customer needs.
People have never been as important to this organization
as they are today given the increased focus on wireless,
data and IP services. This, coupled with low unemployment
rates, an aging workforce with increasing retirements
and an imbalance between supply and demand of
talent in the telecommunications market, creates a challenge
for TELUS and its competitors. If TELUS does not
attract and retain talented employees, it may adversely
affect TELUS’ growth objective and limit TELUS’ ability to
deploy new technology. (See “Organizational restructuring
and TELUS Mobility and Clearnet integration.”)
New Contract Bargaining with the Telecommunications
Workers Union (TWU)
In 2000, TELUS’ application to the Canada Industrial
Relations Board (CIRB) resulted in a new consolidated
bargaining unit. There are five collective agreements
covering over 17,000 employees in Alberta and British
Columbia. At the end of 2000, these agreements expired
and negotiations for a single new collective agreement
commenced in November 2000. Bargaining sessions
are continuing.
TELUS is committed to achieving a collective agreement
that is fair to employees while maintaining customer
focus and being sufficiently flexible to enable TELUS to
operate in a highly competitive market. TELUS recently
received a decision from CIRB that declined to specify
a geographical limitation of the new bargaining unit to
Alberta and British Columbia. TELUS is currently reviewing
this decision to determine the potential impacts.
There can be no assurance that compensation expense
will be as planned, or that reduced productivity and work
disruptions will not occur.
Organizational restructuring and TELUS Mobility and
Clearnet integration
Restructuring and integration activities introduce potential for
temporary customer service degradation
TELUS began a company-wide major organizational
restructuring in the fourth quarter of 2000 that extended
into 2001. In addition, certain systems and processes of
the Clearnet organization continue to be integrated with
those of both the western TELUS Mobility organization
and QuébecTel Mobilité organization to create a cohesive
national TELUS Mobility unit. These initiatives may distract
the organization and negatively impact customer service
levels, TELUS’ competitive position and financial results.
Clearnet integration benefits may not be realized
There can be no assurance that the future operating
expense, capital expenditure and tax savings expected
by management and investors in connection with the
Clearnet acquisition, will materialize as planned.
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