Paul Carpino - Darren Entwistle - Executive Chairman Joseph M. Natale - Chief Executive Officer, President and Director John R. Gossling - Chief Financial Officer and Executive Vice-President

Phillip Huang - Barclays Capital, Research Division Jeffrey Fan - Scotiabank Global Banking and Markets, Research Division Tim Casey - BMO Capital Markets Equity Research Yong Choe - JP Morgan Chase & Co, Research Division Batya Levi - UBS Investment Bank, Research Division Maher Yaghi - Desjardins Securities Inc., Research Division Robert Goff - Euro Pacific Canada, Inc., Research Division

Good afternoon, ladies and gentlemen. Welcome to the TELUS 2015 Q1 Earnings Conference Call. I would like to introduce your speaker, Mr. Paul Carpino. Please go ahead.

Great. Thank you, operator. Good afternoon, everyone, and thank you for joining us. In addition to releasing our strong first quarter results earlier today, we hosted our Annual General Shareholder Meeting in Edmonton. We hope you had a chance to listen as we recapped TELUS' 2014 performance, highlighting our consistent strong track record for delivering industry-leading growth metrics and driving the best returns to shareholders amongst our global peers. The Q1 news release and detailed supplemental investor information have been out for a while and are posted on our website at telus.com/investors. We know it's a busy day for you and you have another call, so we'll keep our prepared remarks brief and then get into the Q&A. On the call today will be Executive Chair, Darren Entwistle, who will provide some opening comments; followed by a review of operational highlights by Joe Natale, President and Chief Executive Officer. John Gossling, our CFO, will then provide a review of our financial results for the quarter. After our prepared remarks, we will conclude with a question-and-answer. Let me direct you to Slide 2. This presentation, answers to questions and statements about future events, such as 2015 targets, intentions for dividend growth and future share purchases, are subject to risks and uncertainties and assumptions. Accordingly, actual performance could differ materially from statements made today, so do not place undue reliance on them. We also disclaim any obligation to update forward-looking statements except as required by law. I ask that you read our legal disclaimers and you refer to the risks and assumptions outlined in our public disclosures and filings with securities commissions in Canada and the United States. Let me now turn the call over to Darren, starting on Slide 3.

Thanks for the great lead-in, Paul. In the first quarter 2015, TELUS continued the consistent and strong performance that is truly our hallmark. Notably, we delivered robust financial results and led the industry in many key performance metrics. In the first quarter, consolidated EBITDA and revenue grew a healthy 5.4% and 4.6%, respectively, and net income and earnings per share both grew at a double-digit rate. Additionally, we led all telecommunications and cable companies in the country in positive RGU growth, adding another 27,000 this quarter. Our client-centric focus also continued to resonate with our customers. In the first quarter, we once again set the industry standard with respect to customer loyalty. Impressively, we have now delivered 7 consecutive quarters of monthly postpaid wireless churn at less than 1%. Additionally, the Commissioner for Complaints for Telecommunication Services highlighted in its midyear report that TELUS once again garnered the lowest number of customer complaints of any national carrier. TELUS had just 4.4% of the complaints referenced in the report, notably below the 28% average of our major competitors. Our high employee engagement has created a powerful corporate culture committed to customer service excellence. The result: consistent industry-leading churn driving meaningful shareholder returns. During the first quarter, we also delivered on our consistent capital allocation strategy focused on growth and returning cash to shareholders. Notably, we secured a national average of 15 megahertz of key spectrum in the recently concluded AWS-3 auction. This core long-term asset is truly essential to Canadians remaining at the forefront of a global digital economy that is increasingly dependent upon speed, reach and security. Finally, our first quarter performance, combined with our industry-leading balance sheet, continues to allow TELUS to deliver on its shareholder-friendly initiatives. Today, we raised our quarterly dividend by 10.5% over the same period a year ago to $1.68 annually. This new quarterly dividend reflects our 16th increase since 2004. Year-to-date, we have also purchased and canceled 4.3 million shares for $176.7 million and paid out $487.3 million in dividends. This has resulted in an impressive $664 million being returned to shareholders in the first 4 months of this year. This builds on an impressive track record where, since 2004, we have purchased and canceled 171 million TELUS shares for $4.6 billion, reflecting an average purchase price of $26.88. Importantly, our share buybacks have now saved $1.2 billion in dividend outflows. Combined with $6.9 billion in dividends paid out over the same period, we have now returned more than $11.5 billion to shareholders, representing $19 per share over the past decade. Importantly, these initiatives have consistently and synergistically been implemented without compromising on our long-term growth strategy. Let me now turn the call over to Joe and John for some brief highlights of the quarter. Thank you. Joseph M. Natale: Thanks, Darren, and good afternoon. This quarter, our team drove strong results and continued to make progress on our Customers First journey. Let me highlight some key drivers behind the momentum that we're seeing in both our wireless and wireline businesses. Starting with wireless on Slide 6. TELUS reported postpaid wireless net additions of 37,000. This represented 80% of net loading by the major national carriers. We have now led the industry in postpaid net additions in 7 of the past 8 quarters. Turning to Slide 7. Our team achieved a postpaid churn rate of 0.91%. This represents a North American industry best and an improvement of 8 basis points year-over-year. This is the 7th consecutive quarter we have reported postpaid churn below 1%. This is a tremendous achievement for our team, reflecting our customer-focused culture as a key differentiator for TELUS. The midyear CCTS results also underscore the success of our Customers First priority. TELUS-related complaints were down again by close to 50% and represented less than 5% of all overall complaints. Moving to Slide 8. We reported our 18th consecutive quarter of year-over-year blended ARPU growth, up more than 3% to an industry-leading $62.34. This continues to be driven by our strategic focus on high-quality subscriber loading and robust data growth reflecting our customers' continued strong adoption of the latest smartphones and data applications. The quality and reliability of our network is essential to supporting this trend and in meeting the evolving needs of our customers. And as you have seen, we made significant investments in acquiring spectrum and expanding our LTE network to support this growth opportunity. As a result of our investments, our 4G LTE network now covers 92% of the Canadian population, while 99% of Canadians continue to enjoy 4G HSPA+ coverage. Turning to Slide 9. Lifetime revenue per subscriber increased again this quarter by 21% to $4,870. This result is up to 36% better than our peers, driven by our leading customer loyalty and increased data usage. Turning to wireline on Slide 10. We continue to build scale on TV and high-speed Internet. TELUS reported first quarter TV net additions of 21,000, with our customer base expanding by over 11% year-over-year. The consumer demand for our premium Optik TV service remains very healthy. It continues to drive market share expansion and great pull-through growth in high-speed Internet. We added 23,000 net Internet subscribers in the quarter. Our high-speed Internet base is up 6% year-over-year and now stands at 1.5 million customers. Residential access lines were down close to 20% to 20,000. Combined TV and high-speed Internet additions of 44,000 exceeded residential line losses for the 19th consecutive quarter by a factor of more than 2:1 based on our compelling bundle. Also, important to note, we continue to see healthy RGU growth in Alberta, in spite of NAL and enterprise losses. TELUS continues to be one of the only major telecommunications companies globally to report growth in wireline customer connections as well as wireline revenue and EBITDA growth. In closing, thanks to our team's consistent focus on putting Customers First, our product innovation and our diverse asset mix, we continue to demonstrate momentum in both our wireless and wireline businesses. And with that, let me turn the call over to John. John R. Gossling: Thanks very much, Joe. Good afternoon, everyone. I'm on Slide 13. First quarter wireless results continue to show our strong operational execution. Network revenue growth of 7.5% was driven by strong data revenue growth of 19%, reflecting subscriber growth, increased adoption of higher-rate 2-year plans and higher data usage as a result of continued growth in smartphones and other data-centric devices. EBITDA increased by 8% due primarily to network revenue growth and operational efficiency initiatives, including the integration of Public Mobile. This growth was partially offset by a 9% increase in retention volume, resulting in higher retention costs and higher customer service and distribution channel expenses. Capital expenditures increased due to our investments in wireless broadband infrastructure to enhance our network coverage, speed and capacity, including the expansion of our LTE footprint and deployment of 700 megahertz spectrum. Moving to Slide 14. Revenue at our wireline business increased by 1.2% due to data revenue growth of 7.2% and as reduced levels of lower-margin equipment sales was more than offset by continued high-speed Internet subscriber growth and higher revenue per customer, a higher TELUS TV subscriber base and growth in business process outsourcing services and increased TELUS Health revenues. Reported wireline EBITDA increased by 1.3%. But when excluding restructuring and other like costs in both periods, wireline EBITDA increased by 2.8%, with a margin of 28.8%, and that's up 50 basis points year-over-year. This EBITDA growth reflected the previously mentioned data revenue growth as well as ongoing operational efficiency initiatives. Capital expenditures increased over the same period last year due to continued investments in broadband network infrastructure, including connecting more homes and businesses directly to our fiber optic broadband network, extending the reach and functionality of our health care solutions, investments in system resiliency and reliability and to support business service growth. As noted on Slide 15, consolidated revenue and EBITDA showed strong growth. Consolidated revenue increased by 4.6%, and consolidated EBITDA was up 5.4% on a reported basis. When excluding restructuring and other like costs, EBITDA was up a healthy 6.2%. Basic earnings per share of $0.68 increased by 11% driven by EBITDA growth and to a lesser extent, lower shares outstanding from our active share repurchase program. The EPS drivers are available in the appendix. Free cash flow of $271 million decreased by 6.9% as higher EBITDA and lower income tax payments were more than offset by higher capital expenditures due mainly to investments in wireless and wireline broadband infrastructure to support our long-term growth. Moving to Slide 16. We had very strong demand for our $1.75 billion in notes used to fund the purchase of our AWS-3 spectrum licenses and to repay short-term indebtedness. Based on the attractive terms of the offering, we have extended our average term to maturity to an impressive 11.1 years and lowered our average cost of long-term debt to an industry best, 4.42%, approximately 42 basis points lower compared to our next closest national peer. At the end of the quarter, our long-term debt to net EBITDA ratio was 2.03x, reflecting our successful acquisition of unprecedented amounts of spectrum over the past 15 months. Given the importance of acquiring this strategic investment, we are updating our guideline for the leverage metric to 2 to 2.5x. We feel that this new range optimizes our cost of capital and puts TELUS' leverage more in line with global peers. The company's strategy is to maintain investment-grade credit rating in the range of BBB+ or the equivalent. Let me now pass the call back to Paul for your questions.

Great. Thanks, John. Operator, can you please proceed with questions from the queue for Darren, Joe and John? [Operator Instructions]

[Operator Instructions] And we have one question from Phillip Huang from Barclays. Phillip Huang - Barclays Capital, Research Division: Question on the fiber investment going forward. Bell has indicated last week that they will only be investing in fiber-to-the-home going forward and no more investing on fiber to the node. Was just wondering what TELUS' position is on fiber investments and will your future investment all be on fiber-to-the-home as well?

Thanks for the question. The preponderance of our investment on a go-forward basis will be fiber-to-the-premise, that would be the home as well as the business as well as key constituencies on the municipal front. You could think of doc offices, pharmacies, health care clinics and the like. But we still take a hybrid approach and look at the economics of a particular deployment, which is why I've said for quite some time, when you look at the technology that we're deploying within our wireline access infrastructure, it's going to be heterogeneous, reflecting a significant push towards fiber but it's not exclusive in that regard, and it's a horses-for-courses type deployment, contingent upon whether it's a greenfield build or whether it's a brownfield build, what the access loop lengths are like, whether it's heavy urban, whether it's rural, whether it's apartment buildings and the like. We customize the approach so that we can maximize the capital efficiency and get the desired economic return. But draw a line under it, more and more, we're going direct to the prem with fiber. Phillip Huang - Barclays Capital, Research Division: Got it. And a quick follow-up on the wireless side. Clearly, the double cohort is not having much of an impact on your churn or margin. Was wondering if you could give us an update on the migration of subscribers to your contracts, perhaps what percentage of your postpaid base is still on 3-year contracts. And have you any increased retention offers on the market into Q2 like -- and whether the market conditions are trending so far -- how they're trending so far relative to your expectations? Joseph M. Natale: Phil, it's Joe. First of all, we're very pleased with our wireless loading and certainly, our loyalty and churn rates in the quarter. Underpinning that is our retention spend as a percentage of network revenue, I think, is strong at 12.1%. Certainly, we're seeing more and more of our 3-year customers renew with us and make the move. We're not going to disclose the specific proportion of -- number of our base that is still on 3 versus 2-year customers. We think that's a sensitive piece of competitive information. But suffice it to say that, from our perspective, the double cohort activity that we've all been talking about and planning for is something that mathematically -- mathematically is something that really starts to accumulate or gain in terms of material size around the June time frame. If you go back to the decision to extinguish 3-year contracts, that happened in June a couple of years ago. At the same time, the 2-year contracts were being signed up at that point. So it's that preponderance of double cohort that's coming into effect then mathematically. The reality in our market is that people's activity is skewed towards one of 2 things: either an iconic device comes to market, the latest iPhone, the latest Samsung Galaxy comes to market, and therefore, creates a buying opportunity for people to kind of pop their heads above the transom and say, "It's time to go shopping for a new phone;" or there's a preponderance of promotional activity in the market. They look at some of the promotional pricing, and it kind of gives them a thought that maybe they should go shopping for a new phone. So those will continue to kind of spread the dynamic overall. There's no question we've been pulling forward some of the double cohort into Q1 of this year, and also, there'll be some in Q2 and a little bit in the last Q4. But the real heavy load, I think, for the industry in terms of double cohort will come in the second half of this year, and it's something that we've been planning for, for a long time. It's something that's built into our guidance, and we feel we're fully prepared for it. I do believe that it remains an opportunity for the TELUS organization. Dynamically, whenever there's been the preponderance of traffic in a shopping mall or a group of people looking for a new wireless service, whether it's back-to-school or Christmas or double cohort, in this case, we do proportionally better because of our best-in-class churn performance and our reputation for customer service that Darren spoke of earlier.

Next question comes from Jeffrey Fan from Scotia Capital. Jeffrey Fan - Scotiabank Global Banking and Markets, Research Division: This is more of a strategic question, probably for Darren. I've noticed that in the last little while, TELUS has announced a couple of arrangements on Wi-Fi with the City of Vancouver and also with taxicabs. And I know these are kinds kind of small, but the way you talked about Wi-Fi in the past was more related to small cell and offload. So I'm wondering if you can just update us on your thinking about these types of arrangements, whether -- I guess the balance is between cannibalizing data usage versus being more consumer-friendly to your customers and also, I guess, the cost of reducing the cost on data with offload. So maybe you can just help us think through that a little bit.

Okay. Jeff, the strategy is -- as I've articulated before, the primary push for us is in respect of a small cell underlay strategy for our macro network so that we can manage traffic extremely effectively, deal with the significant data volumes that we are processing these days and give the customer the maximum experience in terms of speed, functionality and leveraging the smartphone device and the applications that they want to use in that regard. And without a shadow of a doubt, when you think about the amount of money that we have invested, $1.5 billion at the 700 auction; $1.5 billion at the AWS-3 auction; at 1.1 and 1.5, $2.6 billion, and we still have the BRS auction to go, that's a significant investment in spectrum. And the extent to which we can preserve that spectrum by offloading data-centric customers from our macro network to our micro network on the small cell underlay front, I think that is an NPV positive thing for us to do. Whilst there may be some diminishment related to ARPU related to that move, without a shadow of doubt, on a net cash basis, it's positive because we're preserving spectrum -- or we're preserving the technology and infrastructure that carries that spectrum. As it relates to Wi-Fi arrangements, those are customer-specific. So rather than a broad-brush approach, we look at our relationships with key municipalities, like the City of Vancouver. We've got a wide relationship on both the voice and data front and on the wireline and wireless front with them. And we produce client-specific solutions, such as the one that you're referencing. The same thing would be true on the transport side. So that's selective instances of the deployment that are predicated upon the holistic economics of that particular client relationship. So those are the 2 components that kind of lay out what is the focus of the company strategically and then what we do on a point instance basis with certain clients on the both public sector and on the B2B front. Jeffrey Fan - Scotiabank Global Banking and Markets, Research Division: Okay, that's very helpful. And just a very quick follow-up related to the wireline side of the business. Your peers have reported 30 -- the impact of the CRTC cancellation policies, on the 30-day cancellation rule that was put in. Wondering if that had any impact because I didn't see any disclosure in the release. John R. Gossling: Jeff, it's not there because there was no impact. We didn't have that policy in effect, so it had no impact on our reported numbers. Jeffrey Fan - Scotiabank Global Banking and Markets, Research Division: Does that mean you've always had it in place and you didn't have to implement it this time around? John R. Gossling: Yes, we never required customers to give 30 days’ notice, so we haven't... Joseph M. Natale: No, we've always let customers cancel when they wanted to cancel and never forced them to give 30 days’ notice. This was always one of our Customers First policies, so there's nothing to actually kind of crawl back from.

[Operator Instructions] Our next question will be from Tim Casey of BMO. Tim Casey - BMO Capital Markets Equity Research: Could you comment at all on what you foresee as the implications of yesterday's wireless ruling with respect to yourselves and the competitive environment?

Sure. Yesterday's decision, in our view, was a good decision by the CRTC for a number of reasons. One is, I think, it was very consistent with the established regulatory model of facilities-based competition, and I think that's attractive for our industry because facilities-based competition as a regulatory model stimulates investment in infrastructure technology and as well within spectrum auctions. I think that's very good for the country. I think it's a good for Canadians to be at the vanguard of technology progression within an industry as important as mobility. I think the decision is also good for sustainable competitiveness within our industry. There are components of the decision for everyone to like. And finally and most importantly, from TELUS' perspective, we think it's a good decision for consumers. Our mentality has always been putting Customers First, and I think the decision from the CRTC was consistent with that. When it comes to making investment decisions, at TELUS, the thing that matters to us most is transparency and predictability within the regulatory environment, and I think we've got that with the continuity of infrastructure-based competition as it relates to this particular ruling. The other thing that I think is worth probably highlighting, because leading into this decision of the past year, there's been a lot of conjecture as to what the implications were going to be to our company and the like and a lot of speculations, some of it, of course, damaging or dampening in terms of the TELUS stock price. And all I would say is that, putting the last 15 years into perspective, if we've proven anything, we proved that we can be resilient to regulatory decisions, and the reason for that is we've got an excellent and a consistent winning strategy. We've got an organization that leads the world when it comes to employee engagement. That's what drives the superior customer service results that we generate, and that's what our financial and operational results flow from. And I think there's no more tangible demonstration of that than what you saw within Q1. The other thing that I think is important, if you look at the culture of our organization, our preference is not to take an adversarial relationship with the government and the regulator, but rather have one of compromise and collaboration. And then lastly, given how consistent the decision was with facilities-based competition, as someone who started out his career within engineering economics at Bell Canada, doing a succession of Phase 2 cost studies, I am extremely familiar with that component of cost engineering, and I'm confident that, that particular process, the parameters and the economics around Phase 2 costing will derive the appropriate wholesale access rates for our wireless networks as well as what the suitable markup would be in that regard. So overall, I think it's a net positive for us, and I find it encouraging. And I find it encouraging not just as it relates to the point of the decision, but what it portends for the future with other regulatory rulings that will be coming to fruition on the wireline side that we now have a regulator that's focused on continuity in terms of the regulatory model and a regulator that recognizes the importance of investment to support the economic growth within Canada in what is going to be a deeply digital society.

The next question will be from Richard Choe of JPMorgan. Yong Choe - JP Morgan Chase & Co, Research Division: Wanted to ask about the increase in the long-term leverage target of 2 to 2.5, I guess, driven by the spectrum this time around. But can you give us a little more color on what gives the company more comfort in raising that? And then could we see that go even higher? And if so, would it be for more spectrum or an acquisition? Or could it be for capital return, too? Joseph M. Natale: Go ahead, Darren.

So the policy target of 2 to 2.5x is approved by the board. You won't be seeing it go higher, so I'll be definitive about that. Yes, we've seen an atypical level of concentration of capital events, including 3 spectrum auctions in a period that's not much more than 12 months, but we think it's the right long-term policy for this organization. That doesn't mean -- from time to time, we might be outside of that policy, but when we are, I think that policy is a great signal to securities holders as to the deleveraging decisions that we are going to take. In terms of determining that new policy, we put a lot of effort and intellect into it out of John Gossling's team. We actually looked at what the optimum equity and tax-effected debt mix would be for the TELUS organization to minimize our weighted average cost of capital. And interestingly enough, the sweet spot as it relates to minimizing our weighted average cost of capital in terms of the debt/equity mix was a leverage zone of 2.25 to 2.75 net-debt-to-EBITDA, and so we thought 2 to 2.5 was a conservative illustration of that. It supported the minimization of the WACC, which is of course, at the end of the day, tremendously important because if we can hit that sweet spot minimizing the WACC, it supports the economic returns that we want to derive from the capital investments that we're making along the way. Next, when you look at a range of leverage parameters, whether it's credit rating-related and the target of BBB+ that we now have, whether it's liquidity-related or whether it's our net-debt-to-EBITDA policy or EBITDA-to-interest coverage and you compare TELUS to our peers on a global basis, we rank in the top quartile. Such is the robustness of our balance sheet and we intend to maintain that robust balance sheet because it supports a ton of choices for this organization from optionality on organic investments, such as the ones that we've been talking about on the fiber front, or whether it's spectrum acquisitions or whether it's looking at acquisitions in the market, per se. That's a key tool in the repertoire of this organization, and it also supports our ability to return cash to shareholders. And we came close to $700 million being returned to you in the first 4 months of this year. And from a risk point of view, I think it's also important to highlight the management, that John and the team have done, as it relates to both our cost of debt. If you look back historically within the TELUS organization, our cost of debt was between 7.5% -- as high 8.3%, but in that 7.5% to 8% zone -- we've almost cut that in half right now, where our average cost of debt is 4.42%. Also, traditionally, the term to maturity for TELUS was traditionally in the 5-year zone. We've now more than doubled that to 11.1 years. And we didn't just increase the average term to maturity, we've actually smoothed out our maturation profile also into the future, which I think is a very good thing to do if you want to manage the debt markets appropriately. And then lastly, in terms of the robustness of our position, we've got -- looking at our debt portfolio holistically, 97% of our debt is fixed and only 3% is floating. So we think we're in a pretty robust position. And in terms of any near-term money -- attractively priced near-term money that we'd want to access, there are opportunities that are significant for us within the U.S. commercial paper market that we can always avail ourselves of. And then lastly, in terms of what we've done overall with that particular policy guideline, we wanted to have a net-debt-to-EBITDA level that would reflect and support the organic capital investments that we need to make for the long-term to make sure that our dividend growth model and our share buyback programs are recurring rather than finite in nature. And so we look at it across those parameters holistically, and that's the conclusion that we reached. And we've communicated it now.

Our next question will come from Batya Levi of UBS. Batya Levi - UBS Investment Bank, Research Division: Can you provide some color on what you're seeing in the macro environment and spending levels for businesses? I think in the script you mentioned that this was the reason for some slowing in the wireline revenue growth. Are these trends similar to the prior quarter? Or have you seen some incremental pressure? Joseph M. Natale: All right. It's Joe, Batya. If you look at the B2B sector in Canada, they are at a very important inflection point in terms of how large and small businesses are leveraging technology to help enable and support their business goals, their productivity goals, their customer service goals. And we're seeing a lot more of a shift towards cloud services, virtualized services, IP-based services and away from what I would call the sort of more industrial age of telecommunications infrastructure, where companies would typically buy a box, a piece of gear, install it in their basement, in the closet or in a data center and then try to build their own applications over the top of it. We're headed to a world where they would rather buy services, security, infrastructure on a needed basis from a provider, and we're very much in that business. If you look underneath what TELUS is doing, we're doing very well in some of those market areas. Our Internet of Things marketplace is growing substantially in terms of that business segment. Our security services portfolio is growing. Our digital health care solutions business is growing. Our managed infrastructure business is growing, et cetera. The business that was more kind of selling tin boxes, plastic boxes is still there, but it's diminished in size and the margins have become compressed. And that's happening for, in fact, all competitors across the entire sector. And it's that sea change in the B2B sector that we're in the middle of. I think there's good opportunity on the other side, but it will have a dampening effect in the short term with respect to the revenues that used to come from those product areas. Now given the fact that margins were never really stellar to begin with, I think, at the end of the day, we'll still see great performance in terms of operational efficiency of the other parts of our business, but the revenue line in the B2B sector is something that we're watching carefully. Batya Levi - UBS Investment Bank, Research Division: Great, that's helpful. Maybe just one follow-up. Another reason you had talked about is the over-the-top pressure that you're seeing. Strategically, are you positioning the company to capture some of the growth that OTT provides? Joseph M. Natale: Absolutely. Over-the-top for us is a tremendous opportunity. As you've heard me say in the past, if you look at our entertainment solution, we've always believed that we want to be synergistic with over-the-top as opposed to feeling that we're threatened by over-the-top services. That's why you saw the TELUS team integrate Netflix, as an example, into our Optik TV offering as we've integrated other applications in the past, Facebook and the like, and we'll continue to be friendly to the over-the-top providers in that particular category. And as other services emerge that are synergistic with our business, we will absolutely incorporate them into our offerings. Our IoT business is very much an over-the-top business, where we've become a curator of over 100 ideas right now for all types of industries, from farmers to retail stores to oil and gas companies. We're selling services and providing the support layer and providing the confidence in these services because of what we stand for and what we mean and what we can deliver, especially on the security front in those areas. And the list will go on. In the world of business, we've just launched a few weeks ago a product that we call Business Connect. Business Connect is an over-the-top service provided by TELUS. It is a virtualized rich communication service. So think of it as, in the old days, you'd had to have a PBX in your basement, you would have to have a video conferencing server somewhere in your building, you'd have to have 1-800 conference bridge lines and all kinds of audio bridging capabilities. And I would say good luck to if you wanted to integrate voice mail systems, email systems and the like. Business Connect offers all of that on a virtualized basis, hosted by TELUS in our data center and procured by our customers on a per seat or per use basis. And that's the future of the B2B segment, and it's very much embracing OTT.

The next question is coming from Maher Yaghi of Desjardins Capital. Maher Yaghi - Desjardins Securities Inc., Research Division: I wanted to ask a question on the wireline, maybe a follow-up to your comments just now. You seem to be expecting, given your guidance, a pickup in growth in the back half of the year in wireline revenues. Can you maybe tell us where that is coming from? Is that because customers are coming off promotions or price increases? Joseph M. Natale: Go ahead, John. Then I can add a few more thoughts. John R. Gossling: Yes. It's -- in the wireline business, in the revenue line, there's a lot of different pieces, consumer business and Joe has talked about a lot of the different parts of the B2B part of that segment. I think it's really a combination of both consumer and business, where we think that growth is going to come from. Yes, as the base on TV and the Internet gets bigger, there are fewer customers on discounts, and that should help ARPU. We've seen some good churn improvement in the wireline side. So I think it's more a little bit of everything rather than any one particular or 2 particular things that will help to drive that. Maher Yaghi - Desjardins Securities Inc., Research Division: So you're still expecting growth to pick up in the back half of the year, right? John R. Gossling: Yes. Joseph M. Natale: Yes. I mean, we're adding customer connections in both consumer and biz. Bundling is going very well for us. Lifetime revenue in high speed to the home is up 17% this quarter, as one example, overall. And I mentioned all the different business areas that are growing. The thing that's not growing, as I mentioned, is this hardware business, low-margin hardware business, but that's something we've seen coming. And the -- for example, every March, there were large customer purchases from governments around hardware. That has diminished substantially over the last little while and especially this particular year. So all the signs point to continued growth. Our health care business is growing very well, and our managed services business continues to grow. So it's all those pieces coming together. The onus will be on us to make sure that we continue the focus on operational efficiency and driving the margins. And you saw margins improve once again in the wireline business this quarter, and we'll continue to keep the pressure on margin improvement and therefore, deliver the bottom line and the return, which is really what we're most focused on. John R. Gossling: Yes. Maher, just to give you a specific example and maybe a specific number. If you look at the equipment business that Joe has talked about, year-over-year, Q1 this year to last year, that revenue line is down $15 million. A year ago, that revenue line was essentially flat. So that's not a margin driver but that's an example of what's caused some depression in the wireline revenue growth this quarter. But as Joe mentioned, a lot of that activity typically is in Q1, with government fiscal year-ends. So we don't expect that, for example, to recur through the rest of the year. Maher Yaghi - Desjardins Securities Inc., Research Division: Great. And just a follow-up to Darren's comments earlier. If the government continues to propose a facilities-based approach, but apply it now on the wireline side and continue the current restriction -- or let's say, mandate access to fiber-to-the-home similar to what they're doing on TPIA. And we've seen Bell and TELUS, you guys, continue to push fiber-to-the-home deployment, and it seems like it's really the right technology for you guys going forward. But then the question comes if CRTC decides to mandate access to fiber-to-the-home but continue the Phase 2 costing approach. You said publicly, during those hearings, that your deployment of fiber-to-the-home will take a step back. I'm trying to juggle here what's good for the business versus what's good for clients.

Okay. Well, I would postulate, drawing inference from the wholesale wireless decision, that we will see a wholesale wireline decision be consistent with the established policy of facilities-based competition. I can't postulate what the parameters of that are going to be. But I can tell you, right now, that the right thing to do for consumers and for Canada within our digital world and the type of lifestyles that we want to enable for consumers is to have government and regulatory policies that are conducive to, not just continued investment, but heightened investment, such is the importance of this for our country. The issue is, if we have a regulatory intervention that materially undermines the economics of our fiber deployment, then, yes, we will slow our investment or stop our investment. And there's an interesting juxtaposition between fiber and wireless. Within wireless, when you buy your spectrum, you're all in. That's not the case with fiber. Fiber is a modular deployment, and you can tune that strategy according to the contemporary regulatory environment. If it's an attractive regulatory environment, you can elevate your investment cadence. If it's the reverse, then you can truncate your investment cadence. And I think, for us, that's the right way to operate. At the end of the day, we are a corporation that is charged with maximizing value for shareholders, and we will put our CapEx in those areas where we can generate the best return for our shareholders. But I think at the end of the day, the commonality that we have with the government that I absolutely love is that we both want to put Customers First. You look at the type of loyalty and retention rates that we consistently generate and what it means to the economics of the business, we demonstrate that empirically, and I think we share that philosophy with the government. And so the right thing, I think, for the government to do is to support regulatory policies that are conducive to investments that encourage companies to take the risk associated with fiber investment, take the risk in terms of how long it takes us to generate a return from that investment. If you look at any type of modeling, fiber-to-the-home or to the business, the payback period is rather protracted. So if we're going to make a bet on new technology, we're going to supplant our old technology. And if we're going to have to be patient and absorb certain exogenous events within the market as we derive our payback over an extended period of time from this fiber investment, then I think we should be able to enjoy the economic returns that come from taking that particular level of risk without having people prematurely commoditize the value of that infrastructure that we've just made the bet on investing. Down the road, as that fiber optic technology has become institutionalized, it's become ubiquitous, we've been able to derive the type of return from the risk that I just alluded to in the first place. Then thinking progressively about giving people access to that fiber on a wholesale basis is something that we would be open to, even open to doing it at that particular juncture in terms of Phase 2 costing. And there's a really important point here in terms of if you want to understand the strategy of TELUS both on wireless and on wireline, and it really was percolating within the over-the-top discussion that just transpired; we are builders of ecosystems, whether it's an ecosystem within the home that ranges from entertainment and data communication to security, whether it's an ecosystem within primary care, within health care where we want to connect people with docs and docs with pharmacists. We build the ecosystems and then invite people, in terms of the application development, to come into those ecosystems with those well-heeled networks that are delivering that reach, that functionality, that reliability, that security and so on and so forth. And I would say give us the right regulatory policies, have the future consistent with the past in that regard, that are conducive to the construction of those ecosystems. That will be the best thing for the citizens of our country over the longer term. That will be the best thing for sustainable competition and strong vibrant Canadian companies.

Our next question will be from Rob Goff of Euro Pacific. Robert Goff - Euro Pacific Canada, Inc., Research Division: My question would be on your outlook for the pricing environment in wireless once you get post the ARPU-stimulating impact of the double cohort. Joseph M. Natale: Rob, it's almost impossible to predict the pricing dynamic in the marketplace, and I'd be loath to even try. I will say that my experience over the last 12 years at TELUS is that it is completely unpredictable, and it's all driven by the competitive intensity in any given period. And the competitive intensity will continue to ebb and flow with the availability of technology, with the movement of customers and with individual competitors own price plans and promotions. And historically, Q1 has been a quieter promotional period -- well, this time it wasn't, it was far from it. In fact, the last month of the quarter was Wild Wild West in terms of promotion. I think it'll continue to be the case, given the number of players in the market, given the relative performance of the players in the market and given the fact that the TELUS organization is bound and determined to continue to grow our business, grow customer connections, grow revenue and profitability. So it's hard to predict the price at all, frankly.

One thing, I think, that's worth pointing out, Bob, is, and it's a long time since we've spoken, but look at the work that Joe and his team have done on lifetime revenue per client. So when you're asking questions about pricing, you think about the creation of economic value. And when you deliver a lifetime revenue per client in the $4,800 zone, that's $700 and $1,300 better than our closest competitors, to me, that's value creation. The second thing that I've always liked about the TELUS organization, simultaneously with preparing for where dynamic pricing might go into the future, the smarter organization always has one eye focused on our cost base so that if you do have competitive pressures driving down price, new technology driving down price, competitors driving down price, regulatory intrusion driving down price, you prepare for that in advance by taking proactive moves with the thing that you can control. You can't always control pricing, but you can control what's going on within the cost base of the organization. And if you can, on a premeditated basis, do things on the cost efficiency front that support long-term margins, then I think you're prepared to deal with any type of pricing eventuality, and I think that's how a smart organization runs itself. Joseph M. Natale: We often talk about ARPU on this call. I would tell you, inside TELUS, we talk about AMPU more often than ARPU, average margin per unit and in fact, even further, we talk about average economic value per unit because that's really the most important element in our business.

Great. Thanks, Rob, and thanks, everyone, for joining the call. THE IRT will be available for any follow-up as well. Thanks again.

Ladies and gentlemen, this concludes the TELUS 2015 Q1 Earnings Conference Call. Thank you for your participation, and have a nice day.