Tel.

+44 (0)20 7232 3090 Traded on

AIM, London
Fax +44 (0)20 7232 3099 Stock Exchange

www.iirgroup.com Regulated and

LSE: IIR authorised by

Telus Corporation 07 July 2008

Update Report – 1Q 08 Results

Data revenues to drive Wireless segment going forward

Common BUY Fundamental research indicates a 41% upside in the common stock over the next 6-24 months. We
Direct
have access
calculated to the
the target full
price report
based free of charge
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Stock prices obtained using DCF and comparative valuation methodologies.
http://www.iirgroup.com/researchoracle/viewreport/show/20214
Ticker: Ta.TO
Target price: C$55.80
Current price1: C$39.69 We reiterate the common stock a BUY with a 6-24 month target price of C$55.80 per share.

NYSE Stock BUY The NYSE stock is expected to appreciate by approximately 35% over the next 6-24 months as the
41% fundamental upside is offset by approximately 6 percentage points downside attributable purely
to the anticipated appreciation of the Canadian dollar against the US dollar over the same period.

Ticker: TU
Target price: US$52.40
We reiterate the NYSE stock a BUY with a 6-24 month target price of US$52.40.
Current price: US$38.85

Supervisor: Jinesh Joshi Investment horizon- short term actionable trading strategies
Analyst: Saurabh Jain This report addresses the needs of strategic investors with a long term investment horizon of 6-24 months. If
Editor: Shem Pennant this report is provided to you by your broker under the Global Settlement, you may now also access (free of
Global Research Director: charge) the short term trading outlook that we publish from time to time for this issuer, looking at the coming
Satish Betadpur, CFA 5-30 days for readers with a shorter trading horizon. These are available on-line only at
www.researchoracle.com.
Next news due:
2Q 08 results, August 2008
Report summary
In 1Q 08, Telus Corporation’s (Telus) total revenues were in line with our estimate, while margins were
above our estimates, primarily due to lower than expected operating expenses, as a percentage of
revenues in 1Q 08. Revenue growth was mainly due to strong performance from the Wireless
segment, driven by robust expansion in subscriber-base in 1Q 08, partially offset by a decline in
Average Revenue Per User (ARPU). The increase in revenues was supported by 3.7% y-o-y growth in
the Wireline segment. Going forward, we expect robust growth in the Wireless segment driven by an
increase in subscriber-base and mounting Wireless Data ARPU, to drive total revenues. Moreover, we
expect marginal growth in the Wireline segment to support overall revenue growth over the next two
years, primarily driven by Data revenues as the company is making infrastructure investments in order
to improve its leadership in key industry verticals. Going forward, we expect EBITDA and operating
margin to display an increasing trend due to lower anticipated operating expenses and Depreciation &
Amortization (D&A) expenses, respectively. However, adjusted1 net income is expected to decline as
we expect financing costs and other costs, as a percentage of revenues, to increase going forward.
However, in light of anticipated strong revenue growth we believe Telus’s common stock represents a
compelling investment opportunity at current levels.

Currency impact for US investors

The impact by itself of the anticipated currency movements on the NYSE stock (now US$38.85),
without considering changes in the share price, is broadly negative and is expected to be:
Over 6 months: US$46.69
Over 12 months: US$41.78
Over 24 months: US$37.44

Page 1 Refer to page 5 for footnotes