Offer to purchase CLEARNET.pdf - About TELUS

with the incumbent local exchange providers. The CRTC also maintains safeguards against cross-subsidization
and anti-competitive pricing, such as price cap regulation of local services and the requirement for an imputation
test showing that a particular service offering which is not fully competitive is priced above incremental cost.
Industry Canada will be conducting the Spectrum Auction, which will likely result in spectrum being
licensed to competitors of TELUS or companies not currently holding cellular or PCS licenses. The number of
competitors may also increase if wireless system operators choose to sell wireless services in bulk to other
companies for resale to the public.
TELUS is a shareholder of Mobility Canada, the shareholders of which are primarily the wireless affiliates
or divisions of Canada’s major telephone companies. Mobility Canada has been restructured and its members
may compete in each other’s territories. There can be no assurance that TELUS will be able to successfully
expand its operations geographically nor that it will be able to successfully compete with new competitors in its
traditional territory. These factors could, in the future, have a material adverse effect on TELUS’ financial
condition and results of operations.
Increasing pressure from international forces may result in changes to the Telecommunications Act and
related statutes reducing restrictions on non-Canadians holding or operating telecommunications common
carriers in Canada or obtaining licenses to operate communications enterprises. This may result in an increase in
the number of international companies entering into the communications services market in Canada, which may
compete with the businesses of TELUS. This increased competition could result in a decrease in the anticipated
revenues of TELUS.
Technology
The telecommunications industry is characterized by rapidly changing technology with the related changes
in customer demands and the need for new products and services at competitive prices. Technological
developments are also shortening product life cycles and facilitating convergence of different segments of the
increasingly global information industry. TELUS’ future success will be impacted by its ability to anticipate,
invest in and implement new technologies with the levels of service and prices that customers demand.
Technological advances may also affect TELUS’ level of earnings by shortening the useful life of some of its
assets. Furthermore, technological advances may well emerge that could reduce or replace the costs of plant and
equipment.
The operations of TELUS’ businesses depend in part upon the successful deployment of continually
evolving wireless communications technologies, which will require significant capital expenditures to deploy.
There can be no assurance that such technologies will be developed according to anticipated schedules, that they
will perform according to expectations, or that they will achieve commercial acceptance. TELUS may be
required to make more capital expenditures than are currently expected if suppliers fail to meet anticipated
schedules, if a technology’s performance falls short of expectations, or if commercial success is not achieved.
The effect of technological changes on the businesses of TELUS cannot be predicted. In addition, it will be
impossible to predict with any certainty whether technology selected by TELUS will prove to be the most
economic, efficient or capable of attracting customer usage. There can be no assurance that TELUS will develop
new products and services which will enable TELUS to compete effectively in the Canadian telecommunications
market.
PCS Operations
TELUS is continuing to incur significant costs to develop a PCS customer base including capital
expenditures, promotional offerings and handset subsidies. Competition is intense in the PCS market.
Regulatory Uncertainty
A significant portion of TELUS activities are regulated and, accordingly, TELUS’ results of operations may
be affected by changes in regulations and decisions by the regulators. Such regulations relate to, among other
things, licensing, competition, the rates TELUS may charge for certain services, the operation and ownership by
TELUS of its communications systems and the ability of TELUS to acquire interests in other communications
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