Paul Carpino - Vice President of Investor Relations Darren Entwistle - President and Chief Executive Officer Doug French - Executive Vice-President and Chief Financial Officer

Phil Huang - Barclays Capital Richard Choe - J.P. Morgan Greg MacDonald - Macquarie Research Maher Yaghi - Desjardins Securities Simon Flannery - Morgan Stanley Vince Valentini - TD Securities Batya Levi - UBS

Good morning ladies and gentleman and welcome to the TELUS 2016 Q3 Earnings Conference Call. I would like to introducer your speaker Mr. Paul Carpino. Please go ahead.

Great. Thank you, Peter. Good morning everyone and thank you for joining us today. The third quarter 2016 news release and detailed supplemental investor information are posted on our website TELUS.com/investors. On the call today will be President and CEO Darren Entwistle who will provide opening comments followed by a review of the third quarter by Doug French our CFO. After our prepared remarks, we will conclude with a question and answer session. In consideration of our day, we are going to try to keep this call for under an hour. Let me direct your attention to Slide 2. This presentation, answers the question and statements about future events including 2016 annual targets and guidance, 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 refer you to the risks and assumptions outlined in our public disclosures in particular in section 10 of TELUS's annual MD&A and filings with securities commission in Canada and the United States. Let me now turn the call over to Darren, starting on Slide 3.

Thanks, Paul and good morning everyone. TELUS delivered strong third quarter results, which continue to highlight the quality of the company’s asset base and the TELUS team’s ability to consistently execute on our multifaceted disciplined growth strategy under pinned by excellence in customer service. TELUS once again maintained industry-leading results in wireless customer loyalty, ARPU growth and lifetime revenue. In additionally expanded margins and delivered very strong consolidated and segmented revenue and EBITDA growth. Importantly, through these consistent results TELUS continues to deliver on an industry best capital return program to our investors. Let me now provide you with some highlights of the quarter. Despite a highly competitive environment and ongoing economic challenges in Alberta TELUS earned strong net additions in both of our wireless and wireline segment with an increase of 115,000 net new customer additions in postpaid wireless, internet and TELUS TV. In wireless network revenue grew 4.9% and EBITDA grew 6.1% a solid increase compared to the same period last year. Moreover, we earned strong postpaid net additions that 87,000 up 26% from the third quarter of 2015. TELUS also continues to earn the best customer loyalty amongst our North American peers achieving a postpaid churn rate of 0.94% in the quarter. TELUS has now delivered a postpaid churn result of less than 1% in 12 of the last 13 quarters, this continues to be an achievement that is unmatched by our global peer group. Importantly, blended ARPU increased by industry leading 3.8% to $66.67. Our teams' commitment to delivering an unparallel of customer expense is the essence of our strong ARPU and industry-leading churn, which in term continues to drive TELUS’s leadership in lifetime revenue for a customer. In this regard at more than $5,600 are current lifetime revenue per subscriber is 18% and 48% higher than our two national peers. Turning to wireline, TELUS once again delivered strong revenue and EBITDA growth this quarter. We continue to be one of the unique telecommunications companies globally to consistently report growth in wireline revenue, wireline EBITDA and wireline customer connections. In this regard, wireline service revenue increased 2.5% in the third quarter. Notably, data revenue grew 7.9% with high-speed Internet additions increasing by 14,000 and total TV net additions growing by 14,000 as well. Wireline EBITDA growth increased an industry leading 5.8% on a year-over-year basis. This increase was driven primarily by growth in data service margins and form TELUS’s ongoing operational efficiency initiatives and the traction that they are realizing. We are particularly pleased with our results of delivering both positive RGUs and strong financial performance despite economic challenges in Alberta and a more recent aggressive price environment in Western Canada. Our residential now losses 25,000 were unchanged for the quarter, with consistent and continue to strong financial performance in the third quarter we continue to demonstrate TELUS’s ability to return capital to shareholders, while simultaneously funding our strategic growth initiatives. Today, our Board announced this 12th dividend increase in the past six years as part of our multiyear 10% per annum dividend growth program, which was launched in May of 2011. With this increase TELUS has successfully delivered on its second consecutive three-year commitment to annual double-digit dividend growth. Uniquely, there are not many corporations in the world in any industry that can invest ardently for the future and simultaneously returns significant amounts of cash to shareholders. This is particularly unprecedented in our industry during the near-term period of elevated higher capital investments and technology, network infrastructure and spectrum for our wireless business. At most companies the combination of deploying significant capital investment for future growth and returning significant amount of capital to investors are mutually exclusive, but at TELUS, its mutually inclusive. As we stated in the past, our steadfastness in delivering shareholder friendly initiatives is the direct result of our long-term strategy focused on consistent and disciplined CapEx investments mostly organic that are in our core business. The strategy has directly translated into TELUS providing the industry, most robust shareholder friendly initiatives, reflecting in TELUS having returned $36.6 billion on impressive $23 per share to shareholders between 2004 and October of 2016. This included $8.4 billion in dividend and $5.2 billion in share purchases. Furthermore, this 12-year track record combined with continued strong operational results and our successful investment strategy but this is our next three-year capital return program commencing in 2017 and running through 2019. Notably these double-digit increases in dividend growth over the past six year, have been accomplished again the back drop of competitive challenges, significant economic volatility, occasional periods of high regulatory uncertainly and elevated levels of capital investment in our core business. Clearly there is an undeniable coloration between our ability to deliver on our shareholder friendly initiatives and the consistent and transparent strategy, which has guided our actions for the past decade and half. I would like to thank, the TELUS team for their passionate commitment to putting customers first and making a difference. And I thank them for their effective execution of our growth and our efficiency initiatives day-in and day-out. Its because of our team’s efforts that our organization is delivering on our industry meeting growth target and our commitments to customers and our commitments to shareholders alike. Now let me turn the call over to Doug.

Thank you Darren. Good morning. I'm on Slide 8. Third quarter wireless results showed strong network revenue growth and improving margins, as a result of solid operational execution in a competitive market. Network revenue grew 4.9% reflecting higher ARPU driven by data and continued high value posted subscriber growth. Adjusted EBITDA increased 6.1% from higher network revenue and cost savings through the execution of our operational efficiency and effectiveness initiatives. Adjusted EBITDA margins were up 130 basis points as revenue grows and expenses control offset at $26 million increase in combined COA and COR costs. Capital expenditures increased year-over-year by 41% reflecting the continued LTE enhancements, spectrum deployments and increased investments in support of our small cell technology and 5G strategy. Moving to wireline on Slide 9. In wireline, revenue increased 2.3% year-over-year. Wireline revenue has now increased year-over-year for 23 consecutive quarters. The growth was quarter was driven by an increase in data revenue of 7.9%, reflecting strong growth from TELUS International, continued high-speed Internet and TV subscriber growth higher revenue per Internet TV subscriber. Offsetting this was a decline in voice and in other revenue. Reported wireline EBITDA increased 5%. When excluding restructuring costs a net real estate gain our adjusted wireline EBITDA increased 4.2% with a margin of 27.8% up 50 basis points year-over-year. Included in the results was an accrual for the remaining ownership of TELUS International operations in Europe. Wireline EBITDA growth was 5.8% excluding this item. EBITDA margin growth reflects execution of our cost efficiency programs and improving margins in internet, business process outsourcing services, TV and health services. CapEx increased 19% due to continued generation of investment on broadband network infrastructure. This included connecting more home and businesses directly to our fibre optic network. Our TELUS PureFibre footprint is now approximately one million homes and businesses. Putting in all together consolidated revenue was up 2.6% with reported EBITDA up nearly 6% as noted on Slide 10. Adjusted EBITDA increased 5.5%. EPS of $0.59 was down 3% year-over-year or 1.5% on an adjusted basis. The EPS drivers are available in the appendix. Free cash flow of $98 million decreased by 68% primarily due to higher CapEx and higher income tax payments this quarter. This was expected and previously guided. Overall, very strong quarter of customer and EBITDA growth, showing the results of our focused to those strategy, our customer first initiatives and our cost efficiency in effectiveness programs. Let me conclude on Slide 11. As we head into the final quarter of the year, we are reiterating our 2016 guidance excluding the effects of compensation changes. In the third quarter, we announced tentative agreement with our Principal Labor Union for five-year agreement subject to positive ratification later this month. Terms to the agreement include lump sum on payments in lieu of general salary increases for July 2016, 2017, and 2018, and compensation in consideration for collective agreement confessions that underpin future productivity improvements. Onetime lump sum on payments to the union team members will occur in December 2016 if ratified. We also decided to align the same approach for compensation of our management employees where in lieu of salary increases for 2017 and 2017 team members will see a lump sum payment. A portion of the lump sum payments we paid with common shares purchased in the market. The complied one-time payment for these changes is expected to be approximately $300 million and will be pain in expensed in the fourth quarter. This amount is excluded from out 2016 guidance conformation. Let me now pass it back to Paul for the question-and-answer period.

Thank you, Doug. Peter can you please proceed with questions from the queue for Darren and Doug.

Okay, thank you. Our first question comes from Phil Huang [Barclays Capital]. Please go ahead.

Hi thanks good morning. So certainly great to see all the wireless metrics performed so they well at the same time a more impressing to see a compromise in margins, and then want to get such strong subscriber in this industry. Just when you look across the major markets is there any specific region that is a bigger driver of your subscriber growth momentum?

Our performance has been strong pervasively on a national basis. The one thing I would highlight off course is the economic to rest that we have been working through within the province of Alberta. It was encouraging for us in Q3 to see some moderation on the wireless side in this regard. We saw improving stabilization in terms of our wireless results on both the consumer side of our business and on the B2B component and so that was encouraging forward as it relates to wireless. But in terms of the overall results holistically, I think it is a strong performance across the board in terms of all the geographies and the markets that we seek to address.

That’s very helpful, in just looking ahead to Q4; obliviously IPhone 7 is certainly top of mind for many consumers. Has the apply eased a bit now, just given the pre-order supply, our understanding seem like it was pretty tight in the industry and do you expect it to be a good, a bigger driver of subsidies and upgrade into Q4 versus Q3. So overall IPhone. Do you see overall item sales you see that as a bigger driver of upgrade in Q4. And do you seek a strong growth momentum extending into the fourth quarter? Thanks Darren.

Okay, I will try and answer those questions sequentially here. I think you just have to look at our COR on a nominal basis to see the rate impact of the IPhone in terms of the economics of our business. We believe it will continue and increase in terms of being a factor within Q4. Particularly, right now given the competitive juxtaposition of the IPhone versus Samsung within our product line up. So in terms of our forecast that were expecting continued strong growth in wireless through the seasonal loading period of Q4, where we have seminal events including, Black Friday, Cyber Monday and of course the Christmas selling period. So the strength that you saw in Q3 in terms of our overall loading, we would expect that to continue into Q4. And of course there is cost a factor for us there on the IPhone front that’s going to get reflected within our COR and COA results. On the flipside, I guess, one of the things that I would highlight for you is the ARPU result on the IPhone front and the churn result on the IPhone front and the combination of that in term of lifetime revenue on the IPhone front is extremely attractive. So the return that we get on that incremental COR and COA investment remains attractive for this organization, because of the ARPU churn and lifetime revenue characteristics that I just described.

That’s very helpful Darren and maybe I could squeeze in one for Doug on cost savings. I was wondering if you could give us an update on what run rate savings we have been able to achieve at the end of the quarter? Thanks.

I think you would have seen our cost increases being very moderate in quarter-over-quarter and year-over-year and you would have seen also our programs last year where we had active reductions of approximately 1500 FTE. So that run rate is making it’s way through. We continue to implement that with other efficiency opportunities, which would include reliability metrics and other line items beyond just FTE. So I think without actually quoting that number, I think that you will see continued improvement in our cost line, you will see our revenues growing faster than our OpEx on that perspective and you should expect that to continue.

Thanks very much.

Thanks Phil. Next question Peter.

Thank you. Your next question comes from Richard Choe [J.P. Morgan]. Please go ahead.

Hey thank you. Wireline had a very strong revenue quarter especially with the tough comp from last year, I guess in thinking about the three buckets of growth, consumer internet, enterprise and then video, is there a one that's doing better than the others and driving growth or are they all kind of contributing equally?

Choe, I think there is certainly a bias within that particular dichotomy on the wireline front, we are seeing strong growth coming from data services, which is skewed towards internet on the consumer front and video on the consumer front. Holistically for us, the enterprise business has been a little bit soft, because of the Alberta impact. So if you look at wireline in general, the growth is coming from data and consumer. The second area that's buttressing that is that we have been I think quite prescient in driving our cost efficiency programs with the TELUS organization across both wireline and wireless. And the thesis behind these cost efficiency programs that we have been running now for almost a year and a half has been to buttress the overall financial results of the organization and you see that in the 5.8% EBITDA growth rate on the wireline side. Number two it provides us with the resiliency to participate in competitive skirmishes and weather competitive intensity and make the necessary growth and retention investments within a competitive environment on both wireline and wireless. And lastly, the cost efficiency programs are underpinning longer term growth initiatives including our fibre-to-the-premises program, which continues to be extremely successful and is one of the things underpinning the data growth rate that I just articulated that we are experiencing within our consumer business.

And has the competitive environment changed at all on the wireline's side of it or wireless side since the end of the quarter?

The wireline side of the business was more aggressive on a year-over-year basis in Western Canada. And I think you can see that reflected in TELUS's results overall. It was not a significant factor in terms of growth; there was very good capacity positioning there, but it had an impact in terms of churn, because of the intensity that we are seeing in that market overall in terms of TELUS's competitive posture versus our cable competitor. I think the response from TELUS has been excellent; you can see that reflected within our financials where the 5.8% EBITDA that I just articulated compares very favorably with any incumbent wireline company on the planet. If you look at the strength of our holistic RGUs, they are positive and you can't say that for very many of our competitors who have negative RGUs. We led our industry nationally on TV nets and we led the west on HSIA net addition. So I would say we are weathering this particular environment quite well. In terms of the impact of churn that I talked about I think our response in the future to our competitors is going to be one where we are proportionate to the extent to which we experience a competitive aggression and reflected in any facet that including pricing. We will respond on a proportionate basis. I was particularly encouraged in looking at our Q3 results, as to the strength of our performance in September as we exited the third quarter and we deploy our response measures to the competitive intensity with excellent effect in the marketplace. The other thing I think you can look from TELUS, over the near medium and longer term is an organization that’s going to focus on quality and product based differentiation through product based innovation. And you can see that with our premium TV and internet products where the only entity in western Canada that’s offering 4K right now on our optic TV platform. And in the months of October we just now launched 4K on Netflix and that’s going to be I think particularly powerful for our organization and leverage our product and our distribution advantages. The other thing that I think is interesting is that our fibre-to-the-premise program on both consumer and business just goes from strength-to-strength and is particularly resilient to the competitive skirmishes that I have just been articulating. And we are in terms of our fibre program and the reciprocal speeds that the technology supports, I would know that were the only Canadian company offering a 150 MEG reciprocal, and the uplink speed on the 150 MEG reciprocal or symmetrical if you will is ten times faster than our cable competitor. And then, when you think about the competitive posture of our organization, I would note that our cable competitor has a 90% overlap with TELUS. But TELUS has only 58% overlap with our cable competitor across our product lines, across the markets that we address, and across our geographies and I think those variances and that diversification is an important consideration when you address any localized competitive intensity. And then the comment that I made earlier, we started taking cost out of this business ardently, effectively and with precession, so that we did not dilute our customer service excellence well over 15 months ago and that program has enjoyed a lot of traction and that helps us weather competitive intensity. It gives us the money to fund our competitive responses, it gives us strong financial result our world leading. And importantly it gives us the cash to invest in programs like fibre-to-the-home. So when I think about how well TELUS is doing, you go back over last five years this company has consistently outperformed on TV and on the internet and overall in terms of RGU growth on the wireline side of the business. And on top of that whilst outperforming on TV, internet and holistic RGUSs, we have now delivered 16 consecutive quarters of EBITDA growth on the wireline side of our business. I think that’s pretty unique within our industry.

Great, thank you.

Thanks Richard, next question Peter.

Thank you. Your next question comes from Greg MacDonald [Macquarie Research]. Please go ahead.

Thanks good morning guys. Darren you may comment on some of the growth factors in wireline, which indeed is a pretty good results. A couple of areas that you haven’t commented on but and largely because they are not big in size, but they are big in disproportion of growth or TELUS International and TELUS Health. Wonder you might give us an update on performance there and to the extent that you are comfortable talk about sustainability into 2017 Thanks.

Okay, in terms of TELUS Health, the performance has been modest and satisfactory but I think would be a lot better. So in terms of TELUS going forward Josh Blair and I are looking for heightened performance out of our TELUS Health business, that executes it’s strategy particularly within the primary care health eco system over 2017, 2018 and 2019. So when I look at Q3, it was okay I would say from modest performance might be characterized as satisfactory. For me I’m a bit disappointed to be transparent on the TELUS Health front. There is so much potential and growth opportunity within TELUS Health, in terms of quality top-line revenue growth, great opportunity for a profit expansion significant opportunity in terms of developing new RGU, particularly with our focus on the primary care health eco system, which is people, homes, doc clinic and pharmacies. So I think we can do a heck of a lot better, that’s what the business is going to be cast with achieving in 2017, 2018 and 2019. In terms of materiality in our overall wireline results, I wouldn’t describe it is as consequential. The TELUS International business is performing extremely strongly, just to give you a little bit of empirical prospective, we are not going to get into continues discloser on TI but to give you an empirical prove point to that particular sub-position in terms of the strength of the growth. EBITDA growth on TELUS International was 30% in Q3 on a year-over-year basis. I like the markets that are addressing the opportunity to move from voice-based BPO business process outsourcing to data business process outsourcing to focus on the IT market in terms of out sourcing solutions. Significant growth, I like the quality of the revenue in the EBITDA at TI, in terms of how the business is developing, the type client base that we have, there is a lot of blue chip brand name within our client base and that client base continues to expand. I love the fact that the [Indiscernible] of TI, is performing so effectively and the business is performing well in Central America, it’s performing well in Eastern Europe and it’s performing well in the Philippine. The diversity of the performance, the pervasiveness of the quality the performance across GI is tremendously exciting. The team there, it’s done a great job. They are extremely dedicated and the opportunities on the data BPO front and IT outsourcing front are tremendously exciting. And then lastly because of TI thesis which is not about labor arbitrage, but it’s about excellence in customer service, which mimics the same strategy that TELUS is perusing. TELUS International is been a terrific supplier to TELUS and giving us material efficiencies and we would not be able to generate the economics that we are experiencing on major J-curve investments. Like TV, like high-speed internet, like the investments that we are making in fibre-to-the-home without the buttressing that we are getting in terms of the overall economics on the support of TELUS International alongside the excellent work of our TELUS team members domestically. So, I look for very strong things from TI in 2017, 2018 and 2019. And I think the partnership that we have got going with Barings right now is absolutely excellent. They are bringing a lot of value to the table; they are helping the organic growth of the business by bringing us client opportunities that can expand our client base. And they are also bringing us interesting opportunities in terms of corporate development, because the growth thesis at TI is an excellent combination of organic growth and very selective and opportune acquisitions. And if you look at our acquisition track record in TI, we have done very-very well making smart selections where we harvested a lot of economic growth from those acquisitions. So, I think the future is very bright over medium, longer term and right now as it relates to TI.

A quick follow-on that, if I go back to TELUS Health, to move your opinion from modest to very happy with that opportunity; the remedies there, are they completely in control; in TELUS's control or are there still issues that have to happen in government for you to be able to hit those targets?

I think some of the exogenous factors that you have articulated would be complementary; they would be the icing on the cake. But in terms of improving TELUS Health, I think it's entirely within our control. It's down to us. The soft performance is management's responsibility, it's my responsibility. I have got to take accountability for that; and when I'm talking about in terms of growth is basic blocking and tackling; so that we grow our personal health record business; we grow our home health monitoring business, we grow our electronic medical records business within docs and clinics. We grow our pharmacy management systems; we have got great products and it's down to us to grow those product basis, those client relationships, the revenue that we derive and the margin that we derive from those products; on a future basis, at a level, at a cadence that's over and above what we are delivering right now. And I think the opportunity is there; we have got to go out and seize it. And so I think it's entirely within our own control. We have exogenous factor improve that, absolutely. But the kind of ability is down to this management team.

So, it sounds like 2017 is an execution period, are we going to be able to see possibly results in 2017 or would that be more 2018, 2019?

No, I would be looking for results in 2017; and a lot 16 year has been execution period. But, for us, there is just too much opportunity on the health side; when you look at the percentage that health is of the overall GDP of our country; the amount of money that's been spent there. And the necessity within a digital world for healthcare transformation where we want to deliver better health outcomes for less money spent, from an efficiency perspective; technology can do that, absolutely, it's in fact a key driver to making that happen. So we don't just have an economic responsibility to our shareholders; we have a responsibility to society to help drive this transportation the technology enables. But even more than that in terms of efficiency and better health outcomes, the technology that we have within the TELUS Health business can actually drive a shift from the remediation of illness to the promotion of wellness. So it's down that go out, particularly with that focus in the primary care health pathology and take our solutions to market and grow profitable revenue from that on a very sustainable basis. So I’m looking and expecting great things from TELUS heath in 2017 and well beyond.

Thanks, Craig. Peter next question please.

Sure, our next question comes from Maher Yaghi [Desjardins Securities]. Please go ahead.

I just have a more big picture question. I'll try to be concise. At the end of 2010 TELUS’s leverage was around 1.8 times since then the company has made significant stock re-purchases and broad valuable spectrum but it is also making major investments in FTTH, leverage is now sitting at about 2.6 times and free cash flow distribution is believe 100%. I think the question on this mind is when this FTTH investment cycles comes to pass where we should we expect leverage to weak?

Okay, so Maher and for everyone on the call, with our efficiency mindset on let's see if I can help with this answer to end this recurring dialogue and put this particular conversation to rest. So firstly, in terms of where we were back in 2010 and where we are right now I don’t think 2.6 is a million miles from 1.8 when we have made the generational investment that we have made in fibre-to-the-premise and spectrum. But in terms of giving you a crystal ball where this organization is going, I'll try now to be as precise as I can. So firstly, in terms of what you can expect, we will continue to invest at this step for the next five years. Why? Because it's the right thing to do, and we are going to do this in terms of both magnitude and timeframe because that’s the magnitude and timeframe required to support the rollout of our band infrastructure across the markets that we want to address on both wireline and wireless. Secondly, it's the right environment for the fibre cost of capital has never been more attractive and in terms of current projections within Canada the cost of capital is expected to remain low, and if you look at our recent debt financing in the U.S. I like the characteristics of our ability to raise money at very attractive levels. Secondly, and this is not something that I have been able to say a very frequently over the last 16 years, the regulatory environment is favorable for us in western Canada to make this investments. I mean we have both the cost of capitals into opportunity and a regulatory environment in terms of the window of opportunity I think there is a responsibility the organization to step through in terms of the generational investment. Thirdly, the wireline, wireless synergies have never been more attractive increasingly we are in world of conversions and fix mobile integration but when you think about fibre now it's not just for 4K TV or faster symmetrical internet. It s also been the foundational access, infrastructure for wireless 5G, in fact fibre will provide not just the back haul for wireless, it will provide the front haul, because we are going to leave in and increasingly symmetrical world in terms of data traffic. In terms of the economy’s scope, the opportunity is not just in the consumer market, it’s also in the business market, it’s in the public sector market. Greg just asked me about the healthcare opportunity and I talked about our growth focus on the primarily care health topology, homes, people, docs, clinics and pharmacies were all within the foot print of our fibre deployment and enabling that broadband infrastructure is going to allow us to move help data around, that topology in a more affective in more efficient passion. Next because this program is an organic program, we can toggle the investment according to the performance and I like that particular portion. And I would tell you right now the performance, the consistent performance of our fibre program want it the investment that we are making. We are investing into the momentum that we are experiencing in this particular program it’s coming through in terms of net additions, it’s coming through in terms of the revenue per client and it’s coming through in terms of clients royalty in retention and a better way prime revenue for relationship as a result. And so it’s earnings it’s way to this particular investment. The profit growth that we are delivering and the strength of our balance sheet enables our ability to effort this investment and still deliver on our multiyear dividend growth model. And so you think okay, 6.1% performance on wireless in terms of EBITDA growth, 5.8% EBITDA growth on wireline. We are generating the strength of performance winning combination with the quality of our balance sheet and I think Moody’s pronouncement was interesting in that regard allows us to make this investment and still deliver on our multiyear dividend growth model. And so one of the things I would say to you is, given the strong performance, isn’t it hard to answer the question, why would I stop investing. And to me the best analogy would be TELUS not participating in it’s spectrum option. That would be the best analogy to say, why would we seized and desist from a very successful fibre program that is so supportive to the future of the organization. The other things about this particular program, as I said it’s organic. And if you look at the history of investments within the telecoms industry, the most successful investments have typically came from organic investments rather than acquisitions. The other benefits in terms of investing into success, is that we in the future, in organic investment can moderate it. So if we are not a successful, we can dial it down and for more successful we can dial it up. You can’t do that within acquisition after you make the investment in acquisition you short your bull and got aware accountability for ever after. And in terms of organic investments you can toggle with according to the earned performance of the program that you are supporting. Next in terms of what you can expect from us, over 2017, 2018 and 2019 within the vein of precision. I would say the type of EBITDA growth that we have generated in Q3, the type of EBITDA growth that we are postulating for the full-year 2016 is the type of EBITDA growth that you can expect within this organization in 2017, 2018 and 2019 in terms of how we are going to be calibrating and delivering on the financial results of this organization. Next in terms of precision on the back of the rationale that I have just given you, as it relates to this generational investment that we are making I would expect TELUS to go free cash flow positive in 2018. We are free cash flow negative now, not because of the dividend, we are free cash flow negative now because we are raising money to invest in our business, on broadband wireless and broadband wireline. So in 2018 I expect us to turn materially free cash flow positive and remain free cash flow positive and grow our free cash flow from that 2018 point forward, normalizing for unique events like spectrum auctions. So, in terms of what you can expect to see, 2018 will be materially cash flow positive within that year. We are going to sustain that in terms of being free cash flow positive thereafter and we are going to be growing our free cash flow from 2018 onwards and as I said adjusting for any unique event like the spectrum auction. So, you now have EBITDA guidance, you now have free cash flow guidance, you actually have dividend guidance, running through 2019 and you have got the rationale for why this is the right thing to do for this organization.

Thanks Maher. Next question Peter.

Thank you. Our next question comes from Simon Flannery [Morgan Stanley]. Please go ahead.

Darren there is a lot going on in the Teleco M&A market and we have seen companies in the U.S. look to buy content providers we have seen a lot of over the top launchers coming up and certainly obviously running into some problems here. Paid TV ads have been down; what are your thoughts about court cutting over the top skinny bundles, owning content versus being a consumer of content; any changes in our perspective there?

No changes in my perspective as it relates to acquiring content. I think our strategy in that regard has been borne out and proven to be quiet prescient; and excellent for this organization. We think content is important; but we think the value is bundling; distributing the content and having technology like fibre that can differentiate us in that regard or making smart investments in things like LTE advanced in terms of the delivery of content when people are on-the-go. Second comment I would make as it relates to court shading is it's great not be the incumbent. We have recognized a lot of challenges over the years in the telecom's front as the incumbent, as a result of things like competitive intrusion, regulatory intervention or technology evolution. And some of the technology evolution and technology substitution has presented challenges to the organization as it relates to the commoditization of our profit streams; in this particular market on the TV and on the internet front, we are the new entrants. And so I like our growth opportunities going forward in terms of taking future quality share in that regard and we embrace over the top type applications, because we can import them into our optic ecosystem and give the customer what they want on a bundled basis. So, rather than seeing that separate or exogenous or competitive our philosophy here as the new entrant enabled by the fibre technology that we are deploying is to bring new products, new applications, new over the top solutions into the TELUS ecosystem and deliver it with very good effect within the optic framework. The other thing that I think is interesting is that it gives us the opportunity to consider new technologies in segment in the market, so the same way we will look at smartphones as high Tier, medium Tier, lower Tier. I think there is an opportunity to considering how we can tier content from more voluminous on the content front to most spars according to the dealing appetites and content appetites of our consumers. And then thirdly, I think one of the key differentiating practice for TELUS is that where wireline and wireless organization. So again I get back to think it of wireless, wireline integration on a conversion space to fix mobile integration. And I think our ability to take content from traditional to content on the OTT front and deliver it to people's homes to deliver it as required in on the B2B front in to areas like healthcare or also to deliver the human beings within our digital society when they are on the move. I think that combination is very attractive and we can leverage that to good effect. If you look at our overall results it’s been very interesting in terms of what I would expect in the future I would say you can do a entrance from the path. And if you look over the last five years that even with our RGU results in Q3 despite the competitive intensity our loading has been extremely healthy on both internet and on the TV side extremely healthy. And as I said even in the phase of the competitive intensity that we are experiencing with a 28,000 net adds on TV and HSIA despite the elevated churn that we experienced along the way. And then lastly, as it relates to fibre, the fibre take-up as it relates to TV and HSIA and the RGU for household portion is very, very, very attractive. Once we have that wide band connection into the home and the wideband connection with lets 5G for people on either century or on the move basis then we are positioned as the organization with that wideband connectively to people to deliver whatever content solution that we want and a very, very powerful format because of the technology that’s come to fruition and the investments that we made to underpin it. So I feel like we are very strongly positioned in that regard and also we are not delivering these results as a sacrifice of our financials for delivering both the growth and financials conterminously.

Thanks, Simon. Peter we have time for two more questions please.

Okay, thank you. Our next question comes from Vince Valentini [TD Securities]. Please go ahead.

Thanks very much. Just a quick clarification that to the question. In terms of that $300 million outflow on the new union agreement. So if I read you correctly, expensive fully in the fourth quarter and then there will be no impact on your operating expense in 2017 or 2018 to reflect what would have been raise increases otherwise.

Yes and no. We are fully expensive in Q4, but we have positive impact on our financials in 2017 and 2018 as you would expect, because part of the lump sum is for salary freezes over 2017 and 2018. So we are not going to have general wage increases at either the union or the management level in that regard and as Doug rightly pointed out in his remarks. That parity is important because we have one culture at TELUS not two. The other component on the lump sums that will support the financial performance of the organization going forward is that we have bought certain contract and sessions within and what is right now a tentative agreement. But if that agreement gets ratified, those concessions we yield both productivity improvements that will support the financial goals for 2017 that I just actually articulated. The other things that those concessions will do, will help us continue to elevate our customers service excellence and that had been the key to our financial success and you don’t have to look any further in our 56,00 and $50 that we generated on wireless pipeline revenue to underscore that particular point. The rational in terms of why we have done the lump sum payments is three fold. Number one is after the hedge, I think the future comparative environment on both wireline and wireless, over 2017 and 2018, I have the smart thing to do. Secondly it buttresses our generation of investments in wideband and both the wireline and the wireless front and that’s important. And third we get buttress TELUS relative to the duration and the duress of the economic environment in Alberta. So from a risk management that point of view, I would consider that to be sang one. I think it also provides Vince the right balance, because here I think we are doing the right thing for our company, the right thing for investors, but we are also to the lump sums doing the right thing for our team members. And lastly, just anticipating the question the program is economically accretive.

That’s great, congratulation on that deal. So hopefully quick question to have it. Your wireless CapEx intensity of 16% it’s quite the hard, is there just a difference in what get allocated you, but some of the fibre-to-the-premise investment in wireless or are you having to catch up on things like data speeds and dual band carriers or something?

So yes, we put a little bit of the fibre investment in the wireless, because we think that’s the right segmentation. Because I think anyone that knows the technology of wireless knows that the speed and the performance of a wireless network is informed by the wireline network that underpins it. The second factor that may help you with the differentiation is that we are doing swap out of our wireless technology within the province of Quebec. So we are moving from what was formally NSN Technology in Quebec and the Ottawa market to Huawei and that’s a swap that the radio access network level. And so there is CapEx associated with that particular undertaking. But we believe it’s a smart thing to do because, formally of course we have both Huawei and NSN deployed within our wireless network and we liked the performance or characteristics on the Huawei front as it relates to drop call rates, access failure throughput speeds, signals attenuation or lack there out on so one and so forth. So we have made the decision to undertake that particular swap out, so that’s a CapEx differentiator versus the above organization. But I would expect to see improvements as it relates to our wireless network in the province of Quebec that will serve our clients well and it’s consistent with our customers first philosophy.

Thanks Vince. Last question Peter.

And your last question comes from Batya Levi [UBS]. Please go ahead.

Great thank you. You mentioned that you expect similar growth in EBITDA over the next few years so wondering if you could tell us about what that assumes in terms of the competitive environment. Obviously, you have the best churn in the industry are you baking in potentially an increase in the competition in the next 12 to 18 months? And how would you approach balancing sub growth versus profitability?

So, in terms of our projections for the years ahead, I think it's smart for us to assume that the competitive intensity that we are experiencing today across both wireless and wireline will be the case in the future. And I think that's the right way to run the business, because the current environment as it relates to the competitive intensity is not entirely within our control obviously. And so if you are an organization and you want to plan for success making fanciful suppositions in a hope that there will be an ameliorating competitive intensity and reflecting that within your projections I think is a fool's errand. I think it's better to prepare, plan and make the investments for continued competitive intensity and then if it doesn't fully materialize, well you will be the beneficiary of the investments that you have made and the preparation that you have undertaken. So I just think it's a smart way to run the business and to hedge the strategy effectively of the organization. So, what we are seeing today in terms of competitive intensity is what is baked into our models in the years ahead. Second question that you are asking in terms of quality versus or loading versus financials is, it’s an important question. Firstly, we are focused on financial growth. I think that's our responsibility; revenue and loading is vanity, EBITDA growth; and come 2018 cash flow growth is sanity; and that's also what drives our ability to return capital to our investors. In terms of loading so that you get the financial results that I have been postulating, I think we have got to focus on quality. And what I can tell you is the 26% growth in our postpaid wireless results at the 87,000 level; it's quality loading, which I think will help this organization in 2017 through to 2019. You can see it in the ARPU growth that was industry leading at 3.8%. You can see it in the 32 basis points delta between us and our two major peers, as it relates to customer retention. You can see it in our almost $5,700 lifetime revenue, that's up to 48% better than our peers, you can see it in terms of our disciplined investment in both COA and COR despite the rate challenges of expensive iPhone devices and you can see it washing through the financial results of this organization; and industry leading EBITDA results such as what we have generated on the wireless side of our business. And so when I think about growth going forward it's going to be focused on quality. I think there is some interesting opportunities in terms of expansion; I was very pleased to see the strong loading for the industry. I think that’s good for everyone. And I would applaud my peers in that regard and I think it’s a healthy sign for investors as it relates to wireless and the telecommunications industry. Whether that’s driven by expansion within our country at the population level, whether its expansion of wireless services across new demographics within our society, whether in fact is our digital society where human beings are increasingly accounting for multiple RGUs within our growing digital society or things that are peculiar to TELUS. Alberta showed better stabilization across consumer and business on the wireless front this quarter. I think there is opportunity for future growth and I’m very excite about what the future will hold on the machine-to-machine internet of things level on both wireless and wireline. And for us, the nice thing is we don’t have one growth strategy, we have many. And we got wireless look how it's growing, we got wireline look how its growing and how differentiated it is. We have got a health business; we have got TELUS International so the diversification of that I think speaks to the robustness and the predictability of the economic performance of this organization into the future. And then lastly, you were asking about what I think about growth and the financials in 2017, 2018, and 2019 what the risks are things like how its competitive environment going to evolve. One of the smartest things you can do is take cost out of your business proactively, don’t wait until your experiencing economic duress or you hit a bump in road where competitors invoking an aggressive strategy or you taken have regulatory body blow or you got to invest in a new technology. Take it all proactively, it's what fuels your ability to compete, it's what funds your growth programs and it's what buttresses your financial results. Isn’t it nice to have a complementary situation or financial growth, is the duality of profitable revenue in combination with cost efficiency, so that’s the type of thing in my view is that assure as if you will the desired performance of the organization over the longer term.

Thanks Batya. So that concludes our call. If you have any follow up please feel free to contact to Investor Relations team on behalf of Darren and Doug and everyone at TELUS thank you for taking time out of your busy schedules to join us today.

Ladies and gentlemen this concludes the TELUS 2016 Q3 earnings conference call. Thank you for your participation. And have a nice day.