Subject: [NEXTEL-1] TELUS Reports First Quarter Results

From: [email-masked]
Date: Wed, 05 May 2004 20:35:23 -0400

TELUS Reports First Quarter Results

Strong wireless performance drives earnings and cash flow growth

VANCOUVER, May 5 /PRNewswire-FirstCall/ - TELUS Corporation (TSX: T and
T.A / NYSE: TU) today reported for the first quarter of 2004 excellent
wireless performance at TELUS Mobility and a strong increase in free
cash flow. Operating revenues of $1.8 billion in the quarter increased
4% from a year ago. Overall operating earnings (EBITDA) were up 9% due
to strong performance at TELUS Mobility. Reported earnings per share for
the first quarter were 28 cents, compared to 26 cents for the same
period a year ago.  Free cash flow was $443 million this quarter, a $176
million improvement from a year ago.

FINANCIAL HIGHLIGHTS
Rounded to nearest C$ Millions,
except per share amounts                       3 months ended
March 31
(unaudited)                                     2004      2003  % Change

Operating revenues                           1,803.8   1,740.9       3.6

EBITDA(1)                                      721.3     644.3       8.6

Net income                                     101.3      89.5      13.2

Earnings per share (EPS)                        0.28      0.26       7.7

Capital expenditures                           309.7     207.8      49.0

Cash provided by operating activities          588.1     404.7      45.3

Free cash flow (2)                             443.3     267.6      65.7

(1) Earnings Before Interest, Taxes, Depreciation and Amortization
(EBITDA) is defined as Operating revenues less Operations expense less
Restructuring and workforce reduction costs.

(2) See note 2 of the Consolidated highlights table in management's
discussion and analysis.
Darren Entwistle, president and CEO, commented that "Our strategy to
evolve the revenue mix of TELUS into the growth businesses of wireless
and data has driven consolidated top and bottom line growth. In
addition, it has better positioned TELUS in the face of a challenging
wireline environment. In this regard, our wireline business is focused
on revitalizing revenue growth, creating differentiated customer service
and realizing continued cost efficiency. Moreover, we continue to see
strong growth in high-speed Internet net additions, which now represent
approximately two-thirds of our total Internet subscriber base. TELUS
Mobility stood out this quarter with 19% revenue growth, 39% operating
earnings growth, 14% increase in subscriber net additions and low churn
- a great reflection of our excellence in customer service. Notably, on
a consolidated basis, TELUS continues to generate strong growth in
EBITDA, net income, EPS and cash flow for the benefit of our equity and
debt holders."
Robert McFarlane, executive vice president and CFO, stated "TELUS
generated significant free cash flow of $443 million, up 66% this
quarter from a year ago. This was largely due to higher operating
earnings, cash recovery of prior years' taxes and lower restructuring
payments this quarter, partially offset by higher capital expenditures.
As a result, we continue to delever our balance sheet well ahead of
plan. Given significant semi-annual interest payments in the second and
fourth quarters, combined with a strong consolidated operating outlook,
we expect 2004 free cash flow to exceed $1.1 billion. Additionally,
today we are revising our EPS guidance up five cents per share to a
range of $1.10 to $1.30. This positive outlook obviously bodes well for
TELUS' future financial health and market valuation."

CORPORATE DEVELOPMENTS

TELUS renews bank credit facilities for $1.6 billion
TELUS has received C$1.6 billion in commitments from a syndicate of 18
financial institutions. The new credit facilities consist of a C$800
million (or U.S. dollar equivalent) revolving four-year credit facility
(expiring in 2008) and a C$800 million (or U.S. dollar equivalent)
364-day revolving stand-by credit facility extendible at TELUS' option
for any amount outstanding as at the one-year anniversary date for one
year on a non-revolving basis.

The new facilities will replace TELUS' existing C$2.1 billion of
committed credit facilities prior to their termination dates and have
substantially similar terms with the exception of more flexible
reporting requirements and covenant calculations. These new facilities
are subject to final documentation and are expected to be finalized
shortly.

TELUS' credit rating upgraded to investment grade by Moody's In March,
Moody's Investors Services announced it had upgraded the Senior
Unsecured rating of TELUS Corporation to Baa3 from Ba1 with a stable
outlook.  While this is investment grade, it remains one notch below the
BBB-mid investment grade ratings consistently maintained by the three
other credit rating agencies (Standard & Poor's, Dominion Bond Rating
Services and Fitch Ratings). The upgrade reflected Moody's belief that
the company will, on average, maintain free cash flow in 2004 and 2005.

TELUS wins six-year, $66 million data & IP contract with The
Co-operators Continuing a national expansion effort focused on the
provision of superior data, IP and wireless solutions, TELUS Corporation
today announced a six-year, $66 million contract with The Co-operators,
the largest Canadian-owned, multi-product insurer. Through the term of
the agreement, TELUS will provide Wide Area Network (WAN) and Local Area
Network (LAN) data services to more than 600 Co-operators locations, as
well as an extensive portfolio of voice services.

Designed to deliver enhanced value to The Co-operators, the deal goes
beyond the provision of traditional products and services, positioning
TELUS as a partner in delivering IP solutions contributing to
Co-operators strategic and business drivers. The enhanced reach, speed,
bandwidth and reliability TELUS provides to businesses like The
Co-operators, is increasingly recognized as enabling the IP-based
applications essential to business success.

TELUS signs multi-year deals with the Quebec government

TELUS recently signed two significant contracts, valued at $11.8
million, with the Quebec government. The two deals provide information
technology (IT) solutions to the Quebec Building Authority (QBA) and the
Quebec Pension and Insurance Plan Administrative Commission. In the
first contract, valued at $9 million over 2 years, TELUS will be
providing a customer relations management tool to modernize the
procedures and systems for the QBA. In the second agreement, valued at
$2.8 million over 2.5 years, TELUS will be upgrading and maintaining the
Quebec Pension and Insurance Plan Administrative Commission's IT
infrastructure. These are two of the largest government deals that TELUS
Quebec has signed to date and another example of TELUS' expansion into
Central Canada.

TELUS and O.N.Telcom form strategic alliance

TELUS and O.N.Telcom announced their intent to form a strategic alliance
that provides O.N.Telcom with resources to improve its competitiveness
and financial performance and offers TELUS access to an important market
in Northeastern Ontario. Under the terms of the agreement, TELUS will
provide management support services to O.N.Telcom, as well as access to
its products and services. The agreement provides O.N.Telcom with access
to the TELUS national IP backbone, technology and services while
positioning the company for improved customer service from TELUS'
extensive product and market development initiatives. The strategic
alliance provides both parties with unique marketing opportunities
across O.N.Telcom's existing service area, as well as larger urban
centres like North Bay, Sudbury and Sault Ste. Marie.

TELUS committed to corporate social responsibility - 2003 report now
available At TELUS, we are committed to the role we play in corporate
citizenship and our ability to make a positive difference in the
communities where we live, work and serve. TELUS' 2003 corporate social
responsibility report continues to build on global reporting standards
and best practices for sustainability reporting involving all aspects of
an organization's performance. The report represents an important step
in our journey towards triple bottom-line reporting through discussions
on our economic, environmental, and social performances. Detailed
information on our commitment to corporate social responsibility can be
found in our 2003 corporate social responsibility report, available
online at: telus.com/socialresponsibility.  Canadian Business Magazine
reported in March that TELUS Mobility's approach to hiring the best and
the brightest pays off in many ways, including the promotion of
workplace diversity. The magazine found TELUS Mobility was among the Top
10 Canadian corporations in terms of hiring visible minorities and
aboriginal peoples, and is well ahead of the national corporate average.

TELUS expands services to Internet customers

TELUS continues to deliver on its commitment to provide a wide selection
of legal online music to customers with the launch of Pureradio(TM) from
TELUS. The new service provides high-speed Internet users the ability to
listen to high quality streaming music from 75 continuous play music
channels and the ability to quickly download songs. The launch of
Pureradio follows the recent launch of Puretracks(TM) from TELUS, which
made TELUS Canada's first Internet Service Provider (ISP) to offer a
legal music download service. Both services are based on a partnership
with Moontaxi Media Inc., a leading North American online music
distributor dedicated to delivering high quality music content in both
streaming and download formats.

TELUS also launched TELUS Fast Dial-up to improve the speed of Internet
service for dial-up customers in B.C. and Alberta. Adding TELUS Fast
Dial-up to existing dial-up services provides customers with up to five
times faster Web browsing and downloading access and improved e-mail
capabilities. This new add-on service utilizes sophisticated Web
accelerator technologies that compress, optimize and streamline Web
content. The TELUS Fast Dial-up service is an additional $2.95 per month
on existing dial-up plans.

TELUS Mobility expands Mike, 1X data networks

TELUS Mobility continued its ongoing expansion of its all-in-one Mike
iDEN network into rural and remote regions of Quebec, Ontario, Alberta
and B.C., including Kamloops, the Okanagan Valley, Merritt and sections
of the Coquihalla Highway. In March, TELUS Mobility announced a $4.5
million expansion of its 1X digital wireless network across the
Chaudiere-Appalaches and Cote-Nord regions in Quebec.

New products and services from TELUS Mobility

TELUS Mobility, Nextel extend Direct Connect(TM) service across North
America On May 4, TELUS Mobility and Nextel Communications, Inc.
announced a cross-border roaming partnership allowing Nextel and TELUS
Mobility Mike(R) clients to use their Direct Connect(TM) walkie-talkie
service to stay in instant contact with any other Mike or Nextel user
across North America. The roaming agreement also allows for cross-border
data services, including BlackBerry(R) and mobile e-mail, two-way
messaging and wireless Web access. The instant-contact power of the
Direct Connect Push To Talk(TM) (PTT) service - with its connection
speeds of less than a second - has made the Nextel and Mike networks the
wireless communications network of choice for business across the
continent.  TELUS Mobility expects to extend Direct Connect roaming
services to countries such as Mexico and several South American
countries later in 2004. TELUS Mobility had expanded Direct Connect
service across Canada in October 2003.

TELUS Mobility launches two new BlackBerry(R) devices

Also on May 4, TELUS Mobility and Research In Motion (RIM(R)) launched
two new BlackBerry(R) handhelds devices across Canada. The BlackBerry
7510(TM) operates on TELUS Mobility's Mike network and is the first
BlackBerry device equipped with Mike's Direct Connect walkie-talkie
service. The BlackBerry 7750(TM) operates on TELUS Mobility's national
1X wireless data network, which now includes North American wide
roaming, and is the first 1X BlackBerry equipped with a high-resolution
colour screen. Both BlackBerry models offer mobile professionals a
one-stop wireless solution that allows them to stay connected with
secure, wireless access to e-mail and corporate data, digital phone,
wireless Web access and organizer features.

TELUS Mobility announces production of first Fastap(TM) phone At the
CTIA Wireless 2004 conference in Atlanta in March, Digit Wireless,
consumer electronics giant LG Electronics and TELUS Mobility announced
an agreement to produce the world's first Fastap enabled mobile phone.
Digit's Fastap keypad technology allows mobile phone users to quickly
type text messages and other data using letter, number and punctuation
keys arranged neatly around a standard mobile phone keypad. TELUS
Mobility plans to offer Fastap enabled mobile phones exclusively in
Canada in 2004.

Rugged wireless modems from Sierra Wireless and Cypress Solutions
Targeting the public safety, utility and heavy industry markets, TELUS
Mobility introduced rugged digital wireless data modems from Cypress
Solutions and Sierra Wireless that take advantage of TELUS Mobility's
national 1X wireless data network. The Sierra SWMP555 wireless modem is
a rugged 1X modem certified to both Society of Automotive Engineers and
US military standards for humidity, mechanical shock and vibration. The
embedded Trimble SQ module provides accurate reporting of position and
velocity with ultra-low power consumption. The five new 1X modems from
Cypress Solutions (CTM 100, 101, 102, 110 and 120) offer GPS capability
and have SAE, Oil and Gas and mil-spec certification.

Developments in Wi-Fi

Spotnik and TELUS Mobility extend Wi-Fi to VIA trains
In February, Spotnik Mobile and partner TELUS Mobility announced the
launch of Spotnik MobileSpot(TM) Wi-Fi service aboard high-speed VIA
Rail Canada trains traveling between Montreal and Quebec City. Designed
specifically for the transportation market, MobileSpot allows clients to
access broadband Internet service while in transit and beyond the reach
of conventional Wi-Fi Hotspots. TELUS Mobility and Spotnik have rolled
out hundreds of Hotspots in public locations nationwide.

Wireless industry announces Wi-Fi agreement

Canada's national wireless carriers signed an inter-carrier agreement in
March establishing common standards for roaming and interoperability of
public Wi-Fi Hotspots each operates. TELUS Mobility, Bell Mobility,
Rogers Wireless and Microcell Solutions have joined to create a common
brand identifier for Wi-Fi Hotspots in Canada and to offer a common
browser-based login to all clients to ensure a consistent and secure
experience for users in all Hotspot locations. The four carriers have
also committed to build more than 500 new Hotspot locations over the
next year, which will more than double their number in Canada.
TELUS continues significant support of amateur sport in Canada with new
sponsorships TELUS and the Canadian Snowboard Federation announced that
TELUS has become the official telecommunications sponsor of the Canadian
Snowboard Federation. This significant agreement will extend to 2012,
and provides TELUS with sponsorship of several Canadian Snowboard
Federation initiatives.  TELUS also announced its support for, and the
opening of the TELUS Centre for Sport, an operations headquarters that
brings together key sport agencies focused on improving Canada's
athletic performance. The centre provides much needed office and meeting
space for several sport organizations to promote amateur sport and
prepare athletes and coaches for world-class performance.  This
collaborative new environment will be a hub for management, training and
education for the B.C. sport system.

Dividend declaration

The Board of Directors declared a quarterly dividend of fifteen cents
($0.15) per share on outstanding Common and Non-Voting Shares payable on
July 1, 2004 to shareholders of record on the close of business on June
10, 2004.

Forward-looking statements

This document and the management's discussion and analysis contain
statements about expected future events and financial and operating
results of TELUS Corporation (TELUS or the Company) that are
forward-looking. By their nature, forward-looking statements require the
Company to make assumptions and are subject to inherent risks and
uncertainties.  There is significant risk that predictions and other
forward-looking statements will not prove to be accurate. Readers are
cautioned not to place undue reliance on forward-looking statements as a
number of factors could cause actual future results, conditions, actions
or events to differ materially from the targets, expectations, estimates
or intentions expressed in the forward-looking statements.
Factors that could cause actual results to differ materially include but
are not limited to: competition; economic fluctuations; financing and
debt requirements; tax matters; dividends; human resources (including
the outcome of outstanding labour relations issues); technology
(including reliance on systems and information technology); regulatory
developments; process risks; health and safety; strategic partners;
litigation; business continuity events and other risk factors discussed
herein and listed from time to time in TELUS' reports, comprehensive
public disclosure documents, including the Annual Information Form, and
in other filings with securities commissions in Canada and the United
States.

See the Risks and uncertainties section in TELUS' 2003 Annual Report -
Management's discussion and analysis for further information.

The Company disclaims any intention or obligation to update or revise
any forward-looking statements, whether as a result of new information,
future events or otherwise.

Management's discussion and analysis - May 5, 2004

The following is a discussion of the consolidated financial condition
and results of operations of TELUS Corporation for the three-month
periods ended March 31, 2004 and 2003, and should be read together with
TELUS' interim consolidated financial statements. This discussion
contains forward-looking information that is qualified by reference to,
and should be read together with, the Company's discussion regarding
forward-looking statements (see Forward-looking statements). TELUS'
interim consolidated financial statements have been prepared in
accordance with Canadian generally accepted accounting principles
("GAAP"), which differ in certain respects from U.S. GAAP. See Note 20
to the interim consolidated financial statements for a summary of the
principal differences between Canadian and U.S. GAAP as they relate to
TELUS.  The interim consolidated financial statements and Management's
discussion and analysis have been reviewed by TELUS' Audit Committee and
approved by TELUS' Board of Directors. All amounts are in Canadian
dollars unless otherwise specified.

The following discussion is comprised of significant updates since
Management's discussion and analysis in TELUS' 2003 Annual Report:

1.  Core business, vision and strategy
2.  Key performance drivers
3.  Capability to deliver results
4.  Results
5.  Risks and uncertainties

1.  Core business, vision and strategy
Strategic imperatives

TELUS continues to be guided by its six strategic imperatives
established four years ago that serve as a guideline for the Company's
actions. Some examples of TELUS' progress in 2004 against these
imperatives follow:
Partnering, acquiring and divesting to accelerate the implementation of
TELUS' strategy and focus TELUS' resources on core business

On March 4, TELUS, O.N.Telcom, and the Province of Ontario announced
their intention to enter into a strategic alliance, in which TELUS will
provide O.N. Telcom with management support services and access to its
products and services. The agreement provides O.N.Telcom with access to
the TELUS national IP backbone, technology and services while
positioning O.N.Telcom for improved customer service from TELUS'
extensive product and market development initiatives. The agreement
strengthens TELUS' relationship with the Ontario provincial government.

2.  Key performance drivers
Reaching a collective agreement

In February 2004, TELUS Communications Inc. ("TCI") filed applications
with both the Canadian Industrial Relations Board ("CIRB") and the
Federal Court of Appeal seeking a review of the CIRB's earlier
decisions, which imposed a communications ban and required TCI to offer
binding arbitration to the Telecommunications Workers Union ("TWU"). On
April 8, 2004, the CIRB rendered the full reasons regarding the
complaints that led to its earlier decisions. The CIRB imposed a further
communications ban on TCI, prohibiting communications with bargaining
unit members on matters of employment and collective interest until such
time as the conditions of the Canada Labour Code with respect to gaining
the right to strike or lockout have been satisfied. TCI will also be
seeking reconsideration and a judicial review of the CIRB's April 8,
2004 decision.

TCI and the TWU have had discussions, at times with the assistance of
each party's legal counsel, to agree on the binding arbitration process
such as the selection of an arbitrator, terms of reference/guiding
principles that an arbitrator would take into consideration, hearing
location, dates, etc. The parties have not made much progress.

On March 25, 2004, the TWU filed an application with the CIRB requesting
that the Vice-Chairperson name an arbitrator and specify that such
arbitrator would be responsible for setting the terms of
reference/criteria and procedures related to binding arbitration. On
April 1, 2004, TCI requested that the TWU's application be placed on
hold pending the outcome of the CIRB's reconsideration decision. On
April 8, 2004, the CIRB issued a letter advising both TCI and the union
that the union's application would be placed in abeyance until the CIRB
renders a decision on the reconsideration application.

3.  Capability to deliver results
Capabilities are discussed in the Company's 2003 annual Management's
discussion and analysis.

4.  Results
Critical accounting estimates

The Company's critical accounting estimates are discussed in the
Company's 2003 annual Management's discussion and analysis. The
preparation of financial statements in conformity with generally
accepted accounting principles ("GAAP") requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period.  Actual results could differ
from those estimates.

Accounting policy developments

Share-based compensation (Note 2(a) of the interim consolidated
financial statements)
Commencing with the Company's 2004 fiscal year, the amended
recommendations of the CICA for accounting for share-based compensation
(such amendments arising in 2003) (CICA Handbook Section 3870) apply to
the Company.  The Company has selected the modified-prospective
transition method (also referred to as the retroactive application
without restatement method), implemented effective January 1, 2004. To
reflect the fair value of options granted subsequent to 2001, and
vesting prior to 2004, certain components of common equity in the
December 31, 2003, Consolidated Balance Sheet balances have been
restated.
Equity settled obligations (Note 2(b) of the interim consolidated
financial statements)

Commencing with the Company's 2004 fiscal year, the Company early
adopted the amended recommendations of the CICA for the presentation and
disclosures of financial instruments (CICA Handbook Section 3860)
specifically concerning the classification of obligations that an issuer
can settle with its own equity instruments (such amendments arising in
2003). The amendments result in the Company's convertible debentures
being classified as a liability on the consolidated balance sheets
(previously classified as a component of equity) and the associated
interest expense correspondingly being classified with financing costs
on the consolidated statements of income (previously recorded net of
income taxes as an adjustment to retained earnings). The conversion
option embedded in the convertible debentures continues to be presented
as a component of shareholders' equity. As required, these amended
recommendations have been applied retroactively. As a result of the
reclassification of convertible debentures, minor changes were effected
in historical Net debt to EBITDA ratios, and historical Net debt to
total capitalization ratios. The reclassification of the associated
interest expense resulted in minor changes in historical EBITDA interest
coverage ratios.
Financial impact of price cap decisions

As discussed in detail in TELUS' 2003 annual report management's
discussion and analysis, the price cap regulatory regime has been in
place since June of 2002. The incremental impact of these decisions on
the Communications segment Operating revenues and EBITDA are no longer
expected to be significant. The assumptions for 2004 annual guidance
originally anticipated about $24 million negative impact on revenues,
and $20 million negative impact on EBITDA. It is currently expected that
the negative impact on revenues and EBITDA will be approximately $10
million as a result of a higher inflation rate of 3.4%, as measured by
the 2003 chain-weighted Gross Domestic Product Price Inflation
("GDP-PI"). See Risks and uncertainties - Regulation for an update on
CRTC proceedings that deal with the disposal of amounts accumulated in
price cap deferral accounts.

Results of operations
Consolidated highlights
Quarters ended March 31              2004      2003   Change       %
($ in millions except
per share amounts)

Operating revenues                1,803.8   1,740.9     62.9     3.6

EBITDA(1)                           721.3     664.3     57.0     8.6

Net income                          101.3      89.5     11.8    13.2

Earnings per share, basic
and diluted                         0.28      0.26     0.02     7.7

Cash dividends declared per share    0.15      0.15        -       -

Cash provided by operating
activities                         588.1     404.7    183.4    45.3

Capital expenditures                309.7     207.8    101.9    49.0

Free cash flow(2)                   443.3     267.6    175.7    65.7
Non-GAAP measures used by management to evaluate performance of
business units and segments
(1) Earnings Before Interest, Taxes, Depreciation and Amortization
(EBITDA) is calculated as:
2004 Q1    2003 Q1
--------   --------
Operating revenues                    1,803.8    1,740.9
Less Operations expense               1,066.6    1,070.1
Less Restructuring and workforce
reduction costs                         15.9        6.5
--------   --------
EBITDA                                  721.3      664.3

The Company has issued guidance on and reports EBITDA because it is a
key measure used by management to evaluate performance of business units
and it is utilized in measuring compliance with debt covenants. The
Company also believes EBITDA is a measure commonly reported and widely
used by investors as an indicator of a company's operating performance
and ability to incur and service debt. The Company believes EBITDA
assists investors in comparing a company's performance on a consistent
basis without regard to depreciation and amortization, which are
non-cash in nature and can vary significantly depending upon accounting
methods or non-operating factors such as historical cost. EBITDA is not
a calculation based on Canadian or U.S. GAAP and should not be
considered an alternative to Operating income or Net income in measuring
the Company's performance or used as an exclusive measure of cash flow
because it does not consider the impact of working capital growth,
capital expenditures, debt principal reductions and other sources and
uses of cash, which are disclosed in the consolidated statements of cash
flows.  Investors should carefully consider the specific items included
in TELUS' computation of EBITDA. While EBITDA has been disclosed herein
to permit a more complete comparative analysis of the Company's
operating performance and debt servicing ability relative to other
companies, investors should be cautioned that EBITDA as reported by
TELUS may not be comparable in all instances to EBITDA as reported by
other companies.

(2) Free cash flow excludes certain working capital changes, and other
sources and uses of cash, which are disclosed in the consolidated
statements of cash flows. Free cash flow is not a calculation based on
Canadian or U.S. GAAP and should not be considered an alternative to
consolidated statements of cash flows. Free cash flow is a measure that
can be used to gauge TELUS' performance over time. Investors should be
cautioned that Free cash flow as reported by TELUS may not be comparable
in all instances to Free cash flow as reported by other companies.
While the closest GAAP measure is Cash provided by operating
activities, Free cash flow is relevant because it provides an
indication of how much cash is available before changes in
working capital (such as trade payables, and trade receivables,
which can be significantly distorted by securitization changes
that do not reflect operating results) and after funding capital
expenditures. The following shows the calculation of Free Cash
Flow and reconciles EBITDA and Free cash flow with Cash provided
by operating activities:

2004 Q1    2003 Q1
--------   --------
EBITDA                                  721.3      664.3
Restructuring and workforce reduction
costs, net of cash payments            (52.5)    (147.4)
Excess of share compensation expense
over payments                            5.0          -
Cash interest paid                      (22.8)     (36.0)
Cash interest received                   14.2        1.0
Income taxes received (paid)            104.6       (0.6)
Capital expenditures (capex)           (309.7)    (207.8)
Investment tax credits received
(included in EBITDA or capex and
Income taxes received (paid))         (16.8)      (5.9)
--------   --------
Free cash flow                          443.3      267.6
Deduct excess of share compensation
expense over payments                   (5.0)         -
Add back capital expenditures           309.7      207.8
Share-based compensation                  4.7          -
Net employee defined benefit plans
expense (credit)                         4.9       13.1
Employer contributions to employee
defined benefit plans                  (28.6)     (18.0)
Other net operating activities            6.1        6.9
Non-cash working capital changes
except changes in taxes and interest  (147.0)     (72.7)
--------   --------
Cash provided by operating activities   588.1      404.7

Consolidated Operating revenue and EBITDA increased significantly in the
first quarter of 2004, when compared with the same period in 2003,
primarily as a result of 20.4% growth in TELUS Mobility Network
revenues, with only a 9.0% increase in TELUS Mobility operations
expenses. TELUS' Communications segment experienced a 2.9% decrease in
Operating revenue, primarily in local and long distance services, while
reducing operations expenses by 4.5%.  Further detail is presented below
by segment.
Consolidated Financing costs decreased by $19.3 million in the first
quarter of 2004, when compared with the same period in 2003, as a result
of lower interest on long-term and short-term debt, and increased
interest income including interest income from the settlement of tax
matters. Income before taxes and non-controlling interest increased by
$81.4 million to $164.7 million in the first quarter of 2004 as compared
with the first quarter of 2003, as a result of improved operating
profitability and lower net financing costs. Increased Income taxes were
a result of this higher income and a favourable $47.0 million income tax
adjustment recorded in the first quarter of 2003 for the settlement of
tax matters relating to prior years, which had higher tax rates.
Consequently, Net income increased by $11.8 million or 13.2%.

Basic and diluted earnings per share increased by two cents in the first
quarter of 2004, as compared with the same period last year as a result
of increased Net income, partly offset by a larger number of shares
outstanding.  Basic earnings per share impacts of tax settlements and
related interest for the first quarters of 2004 and 2003 were
approximately four cents and 15 cents, respectively. Excluding these
impacts, basic earnings per share increased by approximately 13 cents.
Significant growth in Cash provided by operating activities and Free
cash flow in the first quarter of 2004, when compared with the first
quarter of 2003, included the cash recovery of income taxes, lower
payments under restructuring programs, improved operating profitability
and lower interest paid. Cash provided by operating activities was net
of a $150 million reduction in securitized receivables, while Free cash
flow was net of an increase in capital expenditures. Communications
segment capital expenditures increased significantly in the first
quarter of 2004, due to investment in new service development and
infrastructure to improve customer service and support new customers.

Communications segment

-  Operating revenues decreased by 2.9% in the first quarter of 2004,
when compared with the same period in 2003. Normalized for the
divestiture of certain application development assets in 2003, Operating
revenues decreased by approximately $25.0 million or 2.0%.
-  Network access lines decreased by 22,000 during the first quarter of
2004 as a result of competition and technological substitution.
-  High speed Internet net additions were 43,600 in the first quarter of
2004, an increase of 35.8% over the first quarter of 2003.
-  Operations expenses decreased by $33.0 million and included
additional Operational Efficiency Program salary and benefit savings of
$23.0 million.
-  EBITDA decreased by $12.2 million from lower revenues and a $9.4
million increase in restructuring charges, partly offset by lower
operations expenses. Restructuring charges were recorded for 2004
initiatives including geographical consolidation of an information
technology department from 15 locations to two primary locations.
-  Cash flow (EBITDA less capital expenditures) decreased by $118.1
million to $214.1 million in the first quarter of 2004, when compared
with the same period in 2003, primarily because of an increase in
capital spending.

Mobility segment
-  Total revenue grew by 18.9% in the first quarter of 2004, when
compared with the same period in 2003. Network revenue grew by 20%
year-over-year for the second successive quarter including a record
increase of $100.3 million in the first quarter of 2004, when compared
with the same period last year.
-  ARPU (average revenue per subscriber unit) increased $3 to $57,
representing a fifth consecutive quarter of year over year increases.
-  Acquisition cost of acquisition ("Acquisition COA") improved to $383
from $425, a notable achievement when coupled with significant
subscriber growth.
-  EBITDA increased by $69.2 million or 38.7% representing a Network
revenue flow through of 69%.
-  EBITDA margin expanded by 5.5 percentage points to 41.8% of Network
revenue (38.9% of total revenue).
-  Cash flow (EBITDA less capital expenditures) increased by $73.2
million or 58.9% to a record $197.5 million.
-  Net subscriber additions were 76,100 or 14.1% higher than the first
quarter of 2003. Notably, higher revenue-generating postpaid subscriber
net additions increased significantly by 49.4%, representing a third
successive quarter of positive growth. Postpaid subscribers were 82.2%
of total net subscriber additions in the first quarter of 2004.
-  Blended churn remained a healthy 1.5%.

The following discussion for Operating revenues, Operations expense,
Restructuring and workforce reduction costs, EBITDA and Capital
expenditures is presented on a segmented basis. All other discussion is
presented for the consolidated financial results.
Operating revenues - Communications segment
Quarters ended March 31              2004     2003   Change        %
($ millions)
Voice local (and contribution)      528.9    538.8     (9.9)    (1.8)
Voice long distance                 229.6    251.1    (21.5)    (8.6)
Data                                339.8    342.8     (3.0)    (0.9)
Other                                72.8     75.8     (3.0)    (4.0)
External operating revenue        1,171.1  1,208.5    (37.4)    (3.1)

Intersegment revenue                 25.0     23.4      1.6      6.8

Total operating revenue           1,196.1  1,231.9    (35.8)    (2.9)

Key operating indicators - Communications segment
(000s)                               2004     2003   Change        %

As at March 31
Network access lines               4,848     4,913      (65)    (1.3)

High-speed Internet subscribers    605.2     442.1    163.1     36.9
Dial-up Internet subscribers       309.1     372.1    (63.0)   (16.9)
-------- --------- -------- --------
Total Internet subscribers(1)      914.3     814.2    100.1     12.3
Quarters ended March 31
Change in network access lines       (22)        2      (24)      NM

High-speed Internet net additions   43.6      32.1     11.5     35.8
Dial-up Internet net reductions    (10.7)    (19.6)     8.9     45.4
-------- --------- --------
Total Internet subscriber net
additions(1)                       32.9      12.5     20.4    163.2

(1) As a result of a subscriber audit following a billing system
conversion in the third quarter of 2002, Internet subscriber counts and
net additions for the first quarter of 2003 are net of reductions of
approximately 6.4 dial-up subscribers and approximately 3.0 high-speed
Internet subscribers.
NM - not meaningful
The Communications segment continued to experience an industry-wide
trend of declining traditional revenues and softness in data revenue
growth.
-  Voice local revenue is generated from: (i) access to the Company's
network, which is provided to customers on a monthly subscription basis;
(ii) from the Company's optional and pay-per-use enhanced services, and;
(iii) the Company's share of contribution pool funds for providing
service in high cost rural service areas. Voice local revenue decreased
in the first quarter of 2004, when compared with the first quarter of
2003, primarily as a result of fewer access lines, partly offset by
modest increases in interconnection and enhanced services revenues.

Consumer network access lines decreased by 12,000 in the first quarter
of 2004 as compared with a decrease of 2,000 in the first quarter of
2003. Consumer line losses resulted from technological substitution,
including substitution to wireless, and competitive activity. Business
network access lines decreased by 10,000 in the first quarter of 2004
compared with an increase of 4,000 in the same period in 2003.  Business
lines decreased primarily as a result of Centrex line losses to
competition (including Alberta Supernet) and migration to more efficient
ISDN services. The year-over-year decrease in total access lines in the
first quarter of 2004 was 1.3%.
-  Voice long distance revenue decreased significantly in first quarter
of 2004, when compared with the same period in 2003. The decrease was
primarily as a result of fewer consumer minutes and price competition.
Wholesale settlement revenues were relatively unchanged as higher
volumes were offset by lower prices. Substitution to alternative
technologies such as e-mail, Internet and wireless contributed to long
distance revenue and minute erosion.
-  Data revenues include Internet access, hosting and applications,
LAN/WAN, gateway service, internetworking and remote access, managed
information technology (IT) services and legacy data services such as
private line, switched data services, data local access, and data
equipment sales. Wireless data revenues are included in Mobility segment
Network revenues. Communications segment data revenue in the first
quarter of 2003 included approximately $10.8 million of application
development revenues from assets that were divested in the second and
fourth quarters last year. Data revenue growth normalized for the
disposal of assets was $7.9 million or 2.3% in the first quarter of
2004, as compared with 2003. Internet service revenues increased by $5.4
million in the first quarter of 2004, when compared with the same period
in 2003, primarily as a result of growth in the Internet subscriber
base. TELUS high-speed Internet subscriber net additions increased by
35.8% in the first quarter of 2004, when compared with the same period
in 2003, bringing high-speed Internet subscribers to 605,200 at March
31, 2004. Managed workplace revenues increased by $12.3 million due to
higher functional outsourcing services. Partly offsetting growth in
Internet and managed workplace were lower legacy data services revenues.

-  Other revenue decreased in the first quarter of 2004, when compared
with the same period in 2003, primarily as a result of lower voice
equipment rental and sales and the conclusion in the first quarter of
2004 of amortization of deferred individual line service grant revenues.
The annual impact of the conclusion of individual line service grants
will be lower revenues of $6.7 million in 2004.  Individual line service
grants were provided in respect of the conversion of multi-party lines
to single lines in high cost rural areas in Alberta in the early 1990s.
-  Intersegment revenues represent services provided by the
Communications segment to the Mobility segment. These revenues are
eliminated upon consolidation together with the associated expense in
TELUS Mobility.

Total external operating revenue discussed above included non-incumbent
local exchange carrier (non-ILEC) revenues of $128.4 million for the
first quarter of 2004, compared with $140.7 million for the same period
in 2003, a decrease of $12.3 million or 8.7%. Growth in non-ILEC
application development revenues was affected by the disposal of certain
assets discussed in data revenues above, reducing the revenues by
approximately $10.8 million in the first quarter of 2004, when compared
with the same period one year ago.  Normalized for such asset disposals,
non-ILEC revenues decreased by approximately $1.5 million or 1.2% as a
result of lower wholesale traffic and prices, partly offset by higher
recurring revenue streams.
The following is a discussion of TELUS Mobility revenues and key
operating indicators.
Operating revenues - Mobility segment
Quarters ended March 31              2004     2003   Change        %
($ millions)
Network revenue                     592.4    492.1    100.3     20.4
Equipment revenue                    40.3     40.3        -        -
External operating revenue          632.7    532.4    100.3     18.8

Intersegment revenue                  4.6      3.7      0.9     24.3

Total operating revenue             637.3    536.1    101.2     18.9

Key operating indicators - Mobility segment
(000s for subscribers
and additions)                      2004     2003   Change        %

As at March 31
Subscribers - postpaid            2,876.5  2,533.9    342.6     13.5
Subscribers - prepaid               623.6    528.3     95.3     18.0
-------- -------- -------- --------
Subscribers - total               3,500.1  3,062.2    437.9     14.3
Digital POPs(1) covered including
roaming/resale (millions)(2)        29.5     27.9      1.6      5.7
Quarters ended March 31
Net subscriber additions - postpaid                            64.7
43.3     21.4     49.4 Net subscriber additions -
prepaid                             11.4     23.4    (12.0)   (51.3)
-------- -------- -------- --------
Net subscriber additions - total     76.1     66.7      9.4     14.1

Churn, per month (%)(3a)              1.5      1.5        -        -
Acquisition COA(3b)
per gross subscriber
addition ($)(3c)                   383      425      (42)    (9.9)
ARPU ($)(3d)                           57       54        3      5.6
Average minutes of use
per subscriber per month ("MOU")     362      315       47     14.9

EBITDA to network revenue (%)        41.8     36.3      5.5        -
Retention COA to network
revenue (%)                          5.0      3.4      1.6        -
EBITDA excluding
Acquisition COA ($ millions)(3e)  336.1    266.1     70.0     26.3
(1) POPs is an acronym for population. A POP refers to one person living
in a population area, which in whole or substantial part is included in
the coverage areas.
(2) TELUS Mobility has not activated all digital-roaming areas. As at
March 31, 2004, TELUS Mobility PCS digital population coverage was 22.2
million and 29.5 million including the roaming/resale agreements
principally with Bell Mobility and Aliant Telecom Wireless.
(3) The following are not measures under accounting principles
generally accepted in Canada and the U.S. These measures are
industry metrics and are useful in assessing the operating
performance of a wireless company. The definitions of these
measures are as follows:
a. Churn is calculated as the number of subscriber units
disconnected during the period divided by the average
number of units on the network, expressed as a rate per
month.
b. Acquisition COA consists of the total of handset
subsidies, commissions, and advertising and promotion
expenses related to the initial customer acquisition
during a given period.
c. Acquisition COA per gross subscriber addition is
Acquisition COA divided by gross subscriber activations during the
period.  d. ARPU is calculated as network service revenue divided by the
average number of units on the network during the period, expressed as a
rate per month.  e. EBITDA excluding Acquisition COA is a measure for
operational profitability normalized for the period costs of adding new
customers.

-  TELUS Mobility Network revenue is generated from monthly billings for
access fees, incremental airtime charges, prepaid time consumed or
expired, wireless Internet services and fees for value-added services.
Network revenue increased 20.4% for the quarter ended March 31, 2004 as
compared with the same period in 2003. This growth was a result of the
continued expansion of the cumulative subscriber base by 14.3% to
approximately 3.5 million subscribers from 3.1 million subscribers one
year ago. In addition, ARPU increased to a Canadian industry-leading $57
in the first quarter of 2004 as compared with $54 in 2003, representing
a fifth successive quarter of year over year increases.

TELUS Mobility's execution of its strategic focus on profitable revenue
growth and subscriber retention resulted in a higher ARPU and slightly
improved year over year churn. The improved ARPU was a result of
increased usage, increased acceptance of data and Internet based
products and pricing discipline. Average minutes of use (MOU) per
subscriber per month were 362 in the first quarter 2004 as compared with
315 in the same period last year. At March 31, 2004, postpaid
subscribers accounted for 82.2% of the total cumulative subscriber base
as compared with 82.7% one-year earlier, remaining relatively stable,
and contributing to the significant ARPU premium TELUS Mobility enjoys
over its competitors. Net postpaid subscriber additions of 64,700 for
the first quarter of 2004 represented 85.0% of all net additions as
compared with 43,300 (64.9%) for the corresponding period in 2003,
representing a significant increase of 49.4%. This was the third
consecutive quarter of positive net postpaid subscriber growth.
Moreover, total net subscriber additions for the first quarter of 2004
improved by 14.1% over the same quarter in 2003.  This overall positive
trend was driven in part by the continued successful advertising
campaign initiated in the fourth quarter of 2003 that highlighted TELUS'
new camera phones and picture messaging service. The campaign helped to
establish a market leadership position for TELUS Mobility in the camera
phone marketplace.
Blended postpaid and prepaid churn rate slightly improved to 1.49% in
the first quarter of 2004 as compared with 1.53% in the first quarter of
2003. Deactivations increased slightly by 10.9% to 154,200 for the first
quarter of 2004 as compared with 139,000 for the same period last year.
This was a notable accomplishment considering a 14.3% increase in the
cumulative subscriber base in the face of aggressive competition. The
low churn rate can be attributed to improved network quality and
coverage, excellent client service levels, client contracts for one to
three years as part of loyalty and retention programs and specific
grandfathered rate plans.
-  Equipment sales, rental and service revenue in the first quarter of
2004 remained unchanged at $40.3 million when compared with the
corresponding quarter in 2003 despite a 12% growth in gross subscriber
additions from 205,700 to 230,300, caused mainly by increased
promotional and contracting activity and improved vendor pricing
including favourable foreign exchange rates passed on to the client.
Handset revenues associated with gross subscriber activations are
included in acquisition COA.
-  Intersegment revenues represent services provided by the Mobility
segment to the Communications segment and are eliminated upon
consolidation along with the associated expense in TELUS Communications.

The following is a discussion of Communications segment expenses.
Operations expense - Communications segment
Quarters ended March 31              2004     2003   Change        %
($ millions)
Salaries, benefits and
other employee-related costs       390.5    400.7    (10.2)    (2.5)
Other operations expenses           316.2    339.0    (22.8)    (6.7)

Total operations expense            706.7    739.7    (33.0)    (4.5)

Operations expense for the Communications segment decreased in first
quarter of 2004, when compared with the first quarter of 2003, primarily
due to Operational Efficiency Program savings and reduced Intercarrier
facilities, transit and termination costs. There were 18,522 full-time
equivalent employees at the end of March 2004, a decrease of 693 when
compared with 19,215 at the end of March 2003.
-  Salaries, benefits and employee-related expenses decreased in the
first quarter of 2004, when compared with the same period in 2003.
Incremental savings in salaries, benefits and employee-related overhead
costs under the Operational Efficiency Program (duration from 2001 to
2003) were $23.0 million in the first quarter of 2004. The final staff
departures in 2004 under this program were approximately 50. In
addition, pension expense for defined benefit and defined contribution
plans decreased by $6.3 million primarily as a result of increased
investment returns in 2003. Consequently, TELUS' Communications segment
annual pension expense is expected to decrease by approximately $25.0
million for 2004, when compared with 2003.  These reductions were partly
offset by a $5.2 million share-based compensation expense, recognized
commencing January 1, 2004, as discussed in Accounting policy
developments. Overtime expenses in the first quarter of 2004 increased
by $3.0 million when compared with the first quarter of 2003, but were
$6.0 million lower when compared with the fourth quarter of 2003. The
increase as compared with the same period in 2003 was incurred primarily
to continue to improve customer service. Additional costs for the new
partnership with the Calgary Health Authority and establishment of the
Montreal call centre were $6.1 million in the first quarter of 2004.
This increased cost was partly offset by savings on outsourcing of
approximately $1.8 million included in Other operations expense. Staff
increased by 107 for these two functions since the beginning of 2004.
All other costs collectively increased in line with inflation rates.
-  Other operations expenses decreased in the first quarter of 2004,
when compared with the same period in 2003, principally due to: (i)
reduced facilities, transit and termination costs, which decreased by
$19.6 million as a result of lower outbound traffic volumes and lower
rates for U.S. and international traffic termination, as well as
migration of off-net costs to on-net facilities; (ii) lower bad debt
expense that decreased by $5.3 million as a result of tightened credit
policies, more effective collection practices and reduced loss
experience; and (iii) increased capitalized labour of $5.1 million due
to higher capital investment activity in the first quarter of 2004, when
compared with the same period in 2003. Partially offsetting these lower
costs were $4.1 million increased contract and consulting expenses
incurred for improvement of internal systems and processes, and $3.0
million increased brand and consumer advertising and promotions expense.

Included in the total segment expenses discussed above are non-ILEC
operations expenses for the first quarter of 2004 of $137.5 million, as
compared with $155.2 million for the same period in 2003. This
represented a decrease of $17.7 million or 11.4% as a result of asset
disposals in 2004 and lower wholesale transit and termination costs
associated with lower long distance revenues. Normalized for asset
disposals, non-ILEC operations expenses for the first quarter of 2004
decreased by $9.1 million or 6.2%.
Operations expense - Mobility segment
Quarters ended March 31              2004     2003   Change        %
($ millions)
Equipment sales expenses             89.2     83.8      5.4      6.4
Network operating expenses          102.5     86.1     16.4     19.0
Marketing expenses                   61.4     55.8      5.6     10.0
General and administration
expenses                           136.4    131.8      4.6      3.5

Total operations expense            389.5    357.5     32.0      9.0

http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=109&STORY=/www/story/05-05-2004/0002167655&EDATE=

------------------------ Yahoo! Groups Sponsor ---------------------~-->
Make a clean sweep of pop-up ads. Yahoo! Companion Toolbar.
Now with Pop-Up Blocker. Get it for free!
http://us.click.yahoo.com/L5YrjA/eSIIAA/yQLSAA/61FxlB/TM
---------------------------------------------------------------------~->

-- 
    "NEXTEL-1 IT'S NOT JUST NEXTEL"
  Note The New address 
Subscribe to Nextel-1: http://www.groups.yahoo.com/subscribe/NEXTEL-1

  "NEXTEL2 FOR iDEN SOFTWARE DEVELOPERS"
Subscribe to Nextel2: http://www.groups.yahoo.com/subscribe/NEXTEL2

  "WIRELESS FORUM HOMELAND SECURITY GROUP"
     The Complete Resource for Wireless Homeland Security.
Subscribe to WFHSG:  http://www.groups.yahoo.com/subscribe/WFHSG

Yahoo! Groups Links

<*> To visit your group on the web, go to:
     http://groups.yahoo.com/group/NEXTEL-1/

<*> To unsubscribe from this group, send an email to:
     [email-masked]

<*> Your use of Yahoo! Groups is subject to:
     http://docs.yahoo.com/info/terms/