Good morning ladies and gentleman. Welcome to the TELUS 2019 Q4 Earnings Conference Call. I would like to introduce your speaker, Mr. Robert Mitchell. Please go ahead.

Hello everyone. Thank you for joining the call today. The TELUS fourth quarter 2019 results and 2020 targets news release, annual MD&A, financial statements and detailed supplemental investor information are posted on our website at TELUS.com/investors. On a call today, we have Darren Entwistle, President and CEO; Jeff Puritt, Executive Vice President and President CEO of TELUS International; Doug French, Executive Vice President and CFO; Francois Gratton, Group President and Chair of TELUS Quebec. With that, let me direct your attention to Slide 2 this presentation and answers-to-questions can be Forward-Looking Statements that are subject to risks and uncertainties and made based on certain assumptions. Accordingly, actual performance should differ from the statements made today, so we ask that you do not place undue reliance upon them. We also disclaim any obligation to update forward-looking statements except as required by law. We are free to the description of risks and uncertainties in our annual 2019 and MD&A filed today. Now, let me turn the call over to you, Darren. Starting on Slide 3.

Thanks, Roberto. And good morning, everyone. In 2019, TELUS continued its track record of delivering strong and consistent financial and operating results in both wireless and our wireline business lines. And the trend that the TELUS team has just demonstrated over a longer term continues in terms of the consistency, the excellence and the diversity of our results, across both our wireless and wireline business tenants. Both 2019 and indeed the fourth quarter were characterized by profitable growth with a thoughtful balance between continuing to meaningfully expand our customer base and enhancing profitability quarter-in, quarter-out, year-in, year-out. The fourth quarter, concluded another year of robust client growth where we added a leading 713,000 net customer additions whilst achieving our annual revenue and EBITDA growth targets for now, the ninth consecutive year. We have realized that can achieve performance thanks to the TELUS team unwavering dedication to executing effectively on our longstanding growth strategy. Indeed, our team’s commitment to providing an industry best customer experience over a globally leading network enable TELUS to continue our leadership in respect of customer loyalty and retention. In the fourth quarter consolidated revenue was up and industry leading 3.3%. Moreover EBITDA increase in industry best 5.2%, our team delivered leading fourth quarter customer growth, about 176,000 net additions reflecting the superiority of our broadband networks and customer service as well as our unmatched portfolio of products and services that are clearly resonating with clients, both existing and new. Turning now to take a look at our wireless business. Four quarter network revenue expanded by 2% and was flat versus Q3 adjusting for the impact of lower wholesale roaming revenue and it was driven by our consistent focus on profitable high-quality, Smartphone centric subscriber growth. In respect of wireless EBITDA, TELUS achieved year-over-year growth of almost 5%. Wireless loading in the fourth quarter included 70,000 mobile phone net additions down slightly over last year, largely as we purposely choose to remain on the sidelines for some of the less than economically sanguine competitive activity that was experienced in the fourth quarter of 2019. Notably with an elevated level of competition in the low end of the market, pre-paid losses were offset by strong post-paid loading. Fourth quarter mobile phone net additions were largely unchanged on a year-over-year basis, when adjusting for the CRTC pro rata decision that occurred late in 2018. Net addictions for mobile connected devices of 50,000 were down 5,000 in the quarter, driven by tablet reductions of 3,000 or 36,000 fewer low or negative margin tablets versus last year that were partially offset by strong continued growth in our important IoT business. In totality, wireless net addition inclusive of both mobile phones and connected devices were 130,000 in the fourth quarter. Our fourth quarter results reflect the second full quarter of our Peace of Mind endless data rate plans alongside our attractive TELUS Family Discount offering and Easy Payment device financing. In addition to facilitating a substantially enhanced customer experience on the path of 5G, fee service offerings are supporting sustainable customer growth, enhancing our bundling options and enabling significant opportunities to improve the cost structure of our organization whilst offering customers attractive affordability opportunities pervasively across our [two] (Ph) brand from TELUS to Koodo to public mobile. We continue to be encouraged by the customer response to this exciting product portfolio, including strong adoption with over 50% of migration stepping up to higher monthly plans and tracking favorably to our original business plan of 70% step down. This includes also robust digital adoption with online transaction up 85% on a year-over-year basis, and it includes a 40% improvement in unrecoverable subsidy spend compared to previous plans, and I think the long-term benefits of that are going to be significant for the TELUS organization in particular. Whilst on average, we have seen a decrease in the promotional device cost component of COA and COR, it was amplified in the Black Friday and holiday selling periods. It was due to the high level of competitive intensity around device promotion and the persistence of the subsidy model alongside unlimited data plan exhibited by some of our peers in the industry. Notwithstanding this, easy payment provides compelling tools to enhance handset affordability such as 0% financing, certified pre-owned devices, as well as trade-in and bring it back offerings that are important for our clientele. Looking at customer loyalty, TELUS once again led the industry by a considerable margin with our mobile phone churn rate of 1.2%, which was inclusive of both postpaid and our prepaid results. Notably, this result is up to 63 basis points better, than the blended churn rate posted by our key competitors. The nine basis point increased over last year is reflective of intense competition in the consumer market and heightened industry-wide churn in Q4 as new unlimited data and device financing offers continue to be stress tested through the busy selling periods. The extent of our churn leadership is further illustrated by our postpaid churn rate of 0.95% that we delivered in the fourth quarter. Thanks to our frontline team members, TELUS achieved our sixth consecutive year of industry leading postpaid wireless churn below 1%. And in fact came in below 0.9% for the second straight year in 2019 building upon what we achieved in that regard in 2018. Finally ABPU of $72.79 in the fourth quarter was up 0.3% or roughly in-line with Q3 when adjusting for the impact of lower wholesale roaming revenue. Whilst we indicated that there could be some initial ARPU pressure from our endless data plans, as high value customers get down in particular through heightened market activity characteristic of the holiday season, encouragingly, we continue to see a relatively stable trajectory with respect to ABPU and ARPU. This has been achieved against the backdrop of industry wide robust data growth and increasing data buckets. An ongoing trend that the industry will continue to navigate through, the transition to larger data plans leading up of course to the commercialization and amplification of 5G. Data overage has now become a very, very small part of our overall revenue and longer term we anticipate significant ARPU step-ups and network service revenue expansion as customers move to larger data plans with improved momentum financially through 2020 and beyond. Our positive results continue to be underpinned by our significant broadband network investments. Thanks to the skill and innovation of our team, TELUS earned top spot form Boot Club in respect of networks B and coverage for the fifth consecutive time. And it did change just this morning, open signal released its latest report with Canada plating second in its global ranking behind only both Korea, a country that has already launched nationwide 5G and it is consequently known for its fast wireless speeds. International report TELUS ranked number one in Canada for network excellence, our sixth consecutive win from OpenSignal in this regard. More specifically TELUS’s average 4G download speed of 75 megabit per second it is significantly faster than South Korea’s average of 59 megabits per second within their 5G framework quite an accomplishment, quite a comparison and a very strong notable for Canada in general. These latest reports build on the consistent recognition that we have received every year over the last two years or more from J.D. Power, from PCMag, from Tutela in addition to those from OpenSignal and Ookla. TELUS is clearly the network leader in Canada and amongst the very best globally a key differentiator for our organization, and I would say a terrific springboard and positioning on the ease of 5G being commercialized in our country. Furthermore, a recent robust PwC study on wireless affordability found that a smaller portion of Canadian household penny is used for wireless services as compared to countries such as the U.S and Australia. Indeed, Canadian are spending significantly less as a percentage of income on the basket of services, including home phone, postage, photography, audio, video and print and reading material thus enhancing their disposable income overall. Moreover, when comparing global unlimited plan on speed, comparing them on access, comparing them on data quality and cost per gigabyte, new Canadian unlimited data plans perform the best on average amongst the G7 as well as Australia. The increased data consumption driven by unlimited data plans on world-leading Canadian networks will unleash substantive productivity and value for our economy and Canadian society particularly when using combination with 5G. Today, the telecom sector injects over $50 billion annually into our Canadian economy, which is more than 2.5% of our GDP. With the advent of 5G the telecom contribution to our national economy is expected to quadruple to $200 billion annually. Notably Canada is decades long facilities faced regulatory approach has incentivized billions of dollars of investment to build the infrastructure and deploy the latest technology from urban to rural confines that is required to fuel our digital economy and fuel our digital society and answering some of the biggest social challenges that we face, on the health front, on the environment front and bridging the gap on economic disparity. It is these investments that have resulted in Canada being recognized as having amongst the best wireless networks in the world in terms of speed, quality and coverage, second only to South Korea, a country that has circled one 100th of the size of Canada. Moving out of wireline and our consistently robust financial and operating results in that segment of the business, what a consistent story it is, in terms of the strength of our performance. Indeed TELUS delivered another quarter of industry leading performance. Industry leading in respective revenue, EBITDA and subscriber growth buttressed by our premium, diversify and evolving product portfolio over our globally leading network and underpinning by our industry best customer service. In this regard, fourth quarter wireline revenues increase 7.6%. Importantly wireline data revenue grew by 11% in the quarter driven by robust high speed internet and TV customer growth, strong performance in both TELUS International and TELUS Health and solid growth in home and business security. Wireline EBITDA increased by almost 6% driven by growth in internet, TV and Telco, as well as a solid contribution once again from TELUS International, and of course complemented by our Smart Home and Business Security Services. Impressively, we are now in our eighth year of consecutive quarterly wireline EBITDA growth, a performance unrivaled amongst our global peer group. Looking now at our wireline customers expansion, strong internet net additions of 28,000 were stable over the fourth quarter of 2018. Industry leading TV net additions were 15,000, down 9000 over last year due to heightened competitive activity, as well as an evolving landscape of increase over the top streaming services. Moreover, strong residential voice resiliency continues to be a positive and highly differentiated story for TELUS, coming in at 12,000 net losses, which represent a 1000 improvement over last year, and also represented our third year of flat for moderating voice losses. Security net additions of 15,000 reflect an 11,000 improvement over last year, driven by strong organic growth and enhance bundling opportunities. Notably this excludes any benefit from our acquisition of ADT Canada and we will look to build on a momentum in home and business security solutions in 2020 and well beyond. When including our fourth quarter acquisition of ADT Canada, our year-end security connections increased to include approximately 490,000 subscribers, bringing our base to just over 600,000 security customers as we commence in 2020. Indeed we remain excited with respect to this significantly enhanced scale and incremental opportunities inherent on this transaction, particularly on the back of the strong organic growth momentum that we have established and increasing scale that we have driven in our existing security business in recent quarters as we have been a North American leader in this regard. In summary, we earned an industry leading 46,000 wireline net RGU additions in Q4 and notably TELUS was the only carrier with positive wireline RGUs in the quarter and in the year even when we exclude security. These results also underscore the premium bundled offers available to customers across our highly diversified product portfolio, which includes the superior attributes of our internet, optic TV, pick TV, consumer help, and smart home security and home automation offerings. Our strong and consistent wireline and the combination of potent operating and financial results clearly highlights the importance of our dedicated focus on delivering customer service excellence over what is truly a world leading fiber network. In this regard during the fourth quarter, our team expanded our pure fiber coverage to approximately 70% of our high speed broadband footprint on our way to 80% coverage by the end of 2020. This positions us well, not just for what we want to do in our future friendly home portfolio, but of course the advent of 5G. Notably in 2019 TELUS fiber earned a distinct recognition of providing Canada’s number one Netflix streaming experience and being the country’s best WI-FI provider. Clearly our network awards are not just relegated to wireless, but of course they expand into wireline with this significant third party recognition that we are earning on pure fiber coming from the likes of Netflix and other organizations that have recognized our in-home solutions on the WI-FI. Indeed, more recently, TELUS was recognized as Canada’s bet gaming internet service provider for major ISPs in 2020 by PCMag. These awards are a testament to the significant investments that we have made in our leading pure fiber network and the innovation and the spirit teamwork exemplified by the TELUS team and putting customers first in every single thing that we do and every investment that we make and execute upon. The strong and consistent that has been delivered by the TELUS team, driven by our enhanced pure fiber offerings will support the continued and sustainable growth of wireline and wireless services. And as I said, positions us superbly for the commercial rollout of 5G. In addition to our broadband growth engine, our wireline results continued to be supported by our unique TELUS Health, TELUS AgTech and TELUS International businesses. In a moment, I will hand the call over to Jeff Puritt, for an update on TELUS International and the exciting opportunities stemming from our recent CPC acquisition, which will propel TELUS International to the next phase of its growth as this business significantly scaled and drive significant customers growth and as well significant expansion in the economics of its operations from a scale point of view. We also have Francois Gratton with us to discuss TELUS Health in the Q&A portion of our call. In summary to the success of our strategic growth investments, in combination with our extraordinary team, delivering the industry best customer experience over globally leading networks, we have demonstrated our ability to consistently drive profitable growth over the long-term in both wireless and wireline. Our proven strategy gives us the confidence, again in delivering on the leading annual targets for 2020 that we have announced today, including revenue and EBITDA growth of up to 8% and 7%, respectively. CapEx is expected to further moderate in 2022, to approximately two and three quarter billion dollars as anticipated and we progressed materially of course on our fiber build, and that is reflected in our moderated capital appetite. This alongside strong EBITDA growth will support free cash flow growth of up to $2.1 billion before taxes, representing a year over year increase in free cash flow of 33%. Without question, it is the unparallel execution by our talented team that enables our shareholder friendly initiatives, notably our multiyear dividend growth program, which now quite unbelievably is in its 10th year. In 2019, we returned more than one $1.3 billion to shareholders building on the close to $18 billion we have returned to shareholders since 2004, which represents almost $30 per share. Continuing with the approximate 7% dividend growth achieved in each of the last three years, and following six consecutive prior years of circuit 10% annual dividend growth, we continue to target and additional 7% to 10% annual increases in our dividend in 2020 through 2022. Notably in 2020, we expect to be conformability within our free cash flow, keep free cash flow payout ratio guideline of 60% to 75%. Our dividend growth program is supported by our robust 2020 targets that we have announced today. It is supported by our track-record for delivering against these goals and our expectations for significant free cash flow expansion, not just in 2020, but in the years to come due to a potent combination of moderating CapEx and strong EBITDA growth. Further amplifying the success of our leading track-record our shareholder friendly initiatives. We have announced a two for one shares split that will become effective March 13, 2020. In conclusion 2019, represented another strong year for the TELUS organization and our investors and our 2020 target reflects our team’s commitment to building upon this level of performance in 2020 and the years thereafter. I like again to take this opportunity to thank the TELUS team for their innovation, skill and grit, and consistently delivering on our strategy, navigating the challenges that we always encounter along the way, and for how this translates into strong results for our customers, strong results for investors, the economy and the communities where we live, where we work and where we serve. The positive outcomes generated by our focus on answering key societal issues, enabled us to create value for all of our stakeholders in 2019, including supporting tens and thousands of Canadians through our connecting for good initiatives, which provided almost 40,000 Canadians from low income families, access to low cost subsidized high speed internet through TELUS, internet for good. Supported almost 4,000 youth 18 out of foster care with access to a free smart phone and free data plan through TELUS mobility for good. And finally supporting 22,000 Canadian living on our streets with access to mobile health care with our TELUS Health for good mobile clinics. On that inspiring note, I will turn the call over to Jeff to provide some color on our TELUS International operations. Jeff, over to you.

Thanks very much Darren. Good morning everyone. At the end of January we were very pleased to close the acquisition of TCC, a leading provider of higher value added business services with a focus on customer relationship management and content moderation. The expanded capabilities of our combined companies will further elevate the globally admired customer experience and innovative digital solutions that are synonymous with the TELUS International brand. With this acquisition, TELUS International’s size, scope and reach have now grown to encompass almost 50,000 of the most inspired team members, providing customer experience, digital transformation, content moderation, IT lifecycle, advisory and digital consulting, risk management and back office support in over 50 languages from more than 50 delivery centers in 20 countries across North and Central America, Europe and Asia. This significant increase in TELUS International scale and important and differentiated growth driver for TELUS will support TELUS’ consolidated financial and operating results, including revenue, EBITDA and free cash flow growth. The merger will also support our global leadership in customer service excellence over our world leading broadband network in Canada. Notably, this transaction substantially increased TELUS International estimated enterprise value to approximately $5 billion up from 1.2 billion just over three years ago. On a pro forma basis, TELUS International’s 2019 combined annualized revenue surpassed $1.75 billion with EBITDA of over $400 million. The acquisition of CCC will be immediately revenue and EBITDA accretive to TELUS and to TELUS International as well as EBITDA margin accretive to TELUS International. Additionally, given the moderate capital intensity of the combined business at circa mid single-digits, the transaction will support immediate free cash flow expansion. Moreover, the acquisition of CCC further bolsters the continued advancement of TELUS International to successful growth strategy by positioning us well for a potential future initial public offering targeted in the next 12 months to 24 months, thereby providing us with a transaction currency to support accelerated continued growth in the years to come. Looking ahead, we expect TELUS International EBITDA margins to trend on a higher end of the 20% to 25% range and we anticipate another year of double-digit year-over-year organic EBITDA growth for 2020. We are very excited about the bright prospects ahead for our organization in terms of the opportunities to both grow our customer base and expand services to our current customers, as well as those directly stemming from the acquisition of CCC, all of which will propel TELUS International toward our next growth phase. Let me now turn the call over to Doug to provide some additional details on the fourth quarter and on our targets for 2020. Doug.

Thank you, Jeff and hello everyone. Let’s begin with reviewing our fourth quarter results starting with wireless on Slide 10. Wireless revenue declined 0.5% and was impacted by certain non-operational items including an a typical decline in wholesale roaming revenue in the quarter, as well as the lacking of gain on sale of assets in the prior year. After normalizing these wireless revenue increased 0.2%. This underlying growth was driven by an increase in network revenue of 1.5% or 2%, excluding the wholesale impact, due to a higher subscriber base, primarily offset by a 4% decline in equipment revenue, due to more bring your own device loading, increased device financing transactions and intense competition around device promotions, gift cards and subsidies during the holiday season. Excluding the wholesale roaming revenue impact mobile phone ARPU grew growth would have been 0.3% versus the reported decliner 0.1% ARPU would have shown a decline of 1.2% versus the recorded decline of 1.7%. These trends are being driven in prior by our new service offerings including peace of mind, easy payment, family discounts, partially offsetting their direction and an overage revenue and promotional activity. Despite an intense competitive quarter, wireless adjusted EBITDA increased by 6.9% or 8.8% excluding the previously mentioned items. This reflects higher network revenue growth, lower operating expenses and the implementation of IFRS 16. On a pro forma basis for IFRS 16 adjusted EBITDA increased healthy 3.1% to 4.9%, excluding the above mentioned items. On a pre IFRS 15 basis which reflects more of a cash contribution. adjusted EBITDA was higher by almost 8% for the quarter, reflecting our consistent approach and focusing on smart, profitable subscriber growth. We saw a strong adoption of our easy pay plans and started to recover more subsidies than previously. Let’s turn on Slide 11. In wireline external revenue was up 6.6% driven by synergistic acquisitions, and organic data revenue growth of 11% primarily driven from organic growth in TELUS International and TELUS Health, increased internet enhanced data service revenues reflecting higher revenue per customer as well as a 6.6% increase in our internet subscriber base over the past 12 months. Increased TV revenues reflecting growth of 6.1% of our subscriber base over the past 12 months, and revenues from our home and business smart technology lines - business including security. Wireline adjusted EBITDA increased 9.6% reflecting an increased margin contribution from TELUS International, higher internet margins, higher TELUS Health margins and a growing security business and the implementation of our IFRS 16. In addition, after normalizing for the gains and sales of assets from a period ago, external, external wireline revenue and adjusted EBITDA increased by 7.6 and 13.3 respectively for the fourth quarter. On a pro forma basis excluding IFRS 16 adjusted wireline EBITDA growth of approximately 2.6 or 5.9, excluding the asset gain. Notably once again we led the industry on wireline EBITDA growth on both the reported as well as an excluding IFRS 16 basis. This reflects the value of our fiber investments and the quality of our unique TELUS International and TELUS Health businesses. Consolidated revenue and adjusted EBITDA growth continue to be driven by positive growth contributions from both our wireless and wireline operating segments. As highlighted on note 13 consolidate CapEx was $472 million and was up 4% compared to Q4 last year, reflecting our capital intensity of 19% flat for the same period a year ago. At the end of the quarter more than $2.2 million premises or 70% of our high speed broadband footprint of approximately $3.2 million premises recovered by our TELUS fiber network. Free cash flow before income taxes increased 22% to $209 million, or free cash flow of $135 million was essentially unchanged from a year ago. It is important to remind investors the adoption of IFRS 16 and IFRS 15 as an accounting change only. It does not affect our economic results, economic or financial position, or the cash flow of our business. Our free cash flow metric is calculated by adjusting for these items that are non-cash. A summarized free cash flow continuity is in the appendix of our presentation. Overall, despite the competitive environment, we finished the year of another strong quarter financially and operationally, allowing us to achieve our original 2019 consolidated targets for revenue, the adjusted EBITDA and basic earnings per share. With our consistent strategy and market execution, we continue to drive economically accretive customer loading, which will support future profitability and sustainability of cash flow, while continuing to offer the best customer service on the best networks. As Darren mentioned today, we are establishing our industry leading 2020 solid financial targets as shown on Slide 15. A list of our 2020 assumptions can be found in our disclosure also provided today. Consolidated revenue growth is expected to be 6% to 8%, reflecting the continued growth of data services supported by our strategic investments and advanced broadband technologies in our leading networks. In addition to the close transactions, including ADT and CCC. Our 2020 adjusted EBITDA is targeted to be 5% to 7%. Adjusted EBITDA growth reflect higher revenue, ongoing EBITDA contribution from TELUS Health and TELUS International, as well as the continued focus on operational efficiency and effectiveness. In 2020, total restructuring and other costs are expected to be approximately $150 million including certain ADT integration costs. It is also worth noting that the margin contribution from ADT is expected to be below its normal run rate as we incur integration and customer experience improvement costs in 2020. We expect ADT margins to return to more levels in 2021. Our leading EBITDA growth rates are inclusive of a higher pension expense due to lower accounting discount interest rates, as well as the new CRTC broadband fund. Together these two items impacted our EBITDA estimates by approximately $50 million, or 1% of growth. We will expect to continue our investments to support growth in AgTech where we are adding another element of diversity to our operations, building on the success of TELUS International, as well as TELUS Health. As previously disclosed, we are reiterating our capital target for 2020 and 2021 of approximately $2.75 billion per year. Our CapEx plan reflects, the continued expansion of our leading fiber network and positions our converged network for future capabilities of that 5G networks will enable while supporting sustainable free cash flow expansion. Our growth targets combined with our moderating capital expenditures, results in free cash flow targeted at 1.4 billion to 1.7 billion. We expect our dividend payout ratio to be 60% to 70% of cash flow on a perspective basis. Importantly, our 2020 financial targets are supportive of our multi-year dividend program first announced in May, 2011. Under which TELUS has achieved 18 dividend increases. Before I conclude, I want to spend a moment just to discuss an important reporting change coming later in 2020. As highlighted on Slide 16 in our disclosure today, we will retrospectively recast our reportable segments later in 2020. Specifically, our current wireline and wireless reportable segments will be replaced with two new reportable segments, telecommunications inclusive of both wireless and wireline and a segment capturing TELUS International. This change is how we will grow and manage our business and continuing to build our converged network technologies and the commercialization of fixed wireless solutions has made it increasingly difficult to distinguish between our wireline and wireless operation ash flows and the assets in which they use. Additionally, it has to reflect TULUS International’s continued expansion and enhance scale and significance to our consolidator results as we plan to go public in 12 to 24 months. These progressive changes are now how we will be running, reporting our business into the future and looking at reserves allocations. Importantly, we do not anticipate a significant change in the reporting of our products and services revenue and we will continue to disclose mobile and fixed revenues as well as KPIs on a subscriber related results. A preliminary draft of the new reporting structure is available in the appendix and we will look forward to showing you more as we go forward. Looking out, we remain excited about the future cash flow opportunities across our unique and growing asset base or generational and superior fiber build out continues to lay the foundation for the evolution to 5G positions and TELUS’s broadband network among the best globally. We continue to maintain our transparent and leading given and growth program and our commitment to balancing the interests of all TELUS stakeholders. Now, let me return it back to Robert for Q&A.

Thank you Doug. Mike, can you please proceed with questions from queue.

Of course. So first question comes from Simon Flannery from Morgan Stanley. Please go ahead.

Hi, this is Diego Barajas on for Simon. Firstly how is the competitive intensity trended in the early part of the year and how do you expect that to trend over the back half of the year? Are you also expecting a handset Supercycle driven by 5G handsets? And then second on the EIP do you expect this to materially drive down subsidy this year or when should we expect that benefit? Thank you.

Yes. So I will start off with the second half and then Darren can talk to the competitive nature as we have currently experienced. We do expect to be recovering more hands at a subsidy as we progress throughout 2020. We have seen a good traction on the device financing or the Easy Pay plans and our unlimited plans as Darren mentioned in his item and we are looking warehouse through our product base, we will continue to roll that out in 2020. So we saw a very good traction on recoverability as compared to the first part of 2019. And we expect that trend to continue and as it moves further into the Flanker brands. On the competitive front it continues to be competitive and I would say we expect to be normal course. And I think as the offerings are out there and offering more to our customers at reasonable rates. I think you will just see that as a continuation from 2019.

We expect for Doug’s comment that we will have robust growth in 2020 in the face of a highly competitive environment. I think it would be positive to see a delineation between subsidization and as it relates to our deployment of unlimited data plans and device financing, and to see that delineation fold fast during promotional selling seasons over the course of the year. I think that is the right set of economics for our industry prospectively. But we are expecting within the context of robust competition to deliver in 2020 significant and profitable customer growth building on the strategy that we have had, and in fact in terms of profitable customer expansion for the last few years. Without a doubt we are looking at to deliver improvements in network revenue growth over 2020 with growing momentum that takes place throughout the year seeing ARPU and ABPU stabilize. And then as we work through the rerate as we get into the second half of the year of 2020 in terms of the locking and break the back of the migration to see continued expansion in network revenue growth as it relates to profitable client expansion.

Great. Thank you. And as a quick follow-up on the EiP, how much of EiP working capital drag is within the positive free cash flow guidance?

If you saw in our disclosure, you would have seen that our device financing or EiP plans increased in the period by over 300 million. And so part of it was definitely the financing on that and you will see a little bit of that into 2020 as well. But at the end of the day, economically it will drive better outcomes for the long run. As we see more recoverability of the subsidy and programs such as bringing back as well are definitely economically accretive on how we manage through that.

Great. Thank you.

Mike next question please.

Next question comes from Maher Yaghi from Desjardins. Please go ahead.

Thank you for taking my question. My first question is on the trends in ARPU degradation that you saw in the quarter. I mean it is an industry wide phenomenon. It is not surprising. You can maybe talk a little bit about the trends that you see going forward, how we reach to maybe a trough in terms of the pressure or there is still some to be seen in terms of the year-on-year degradation in ARPU. The second question I had is in the forward-looking segment is reporting changes that you are planning. It is interesting to see that you are looking to remove some of the EBITDA segmentation on a fixed and mobile. Can you talk about why this decision at this point? I recognize the conversions of the networks and going forward, but there is still some really high level operating costs that can be split. So, maybe just talk about your view your view and vision on this phenomenon of integration of wireless and wireline, what it will mean to your product sales operations and market.

Hey Maher, I will kick it off and then hand it over to Doug to talk about the segmentation component. Firstly, as it relates to ARPU and ABPU. As Doug indicated in his remarks, network revenue was impacted in Q4 by atypical non recurring decline in our wholesale roaming revenue. When you normalize for that roaming impact. The trend is completely consistent with the result that we the posted in Q3, to be specific about that ABPU on a normalized basis would be a 0.3% present and network revenue growth would be a 0.2%. And I think we are in a pretty stable position right now, the underlying economics from our peace of mind device financing and family discounts are all moving decidedly in the right direction for TELUS, and I think that is going to yield ARPU - AMPU stabilization and growth through 2020 that will be reflected at the network revenue line. I gave you some color during my remarks, but just to give you a little bit more insight into that, we are looking at 50% of total migrations being either step ups or flat to our business plan and that original business plan, as I remarked upon, had anticipated, 70% step down. So, we are doing better than what we anticipated and clearly, there is an appetite for larger data buckets, which I think is only going to get amplified as we progress into the 5G environment. Encouragingly, as it relates to the AMPU economics of our business to go with our ARPU and ABPU stability we are seeing a 40% improvement in the unrecoverable subsidy spend as compared to our older plans and I think that is going to pay economic dividends prospectively for our organization, and bodes particularly well for 2020 and beyond. Encouragingly we are seeing extremely strong digital adoption, our digital transactions are up almost 100% on a year-over-year basis, with our smart simplification activities, clearly supporting the scaling of better digital results. And I think that bodes well for cost efficiencies within our call centers and also it bodes well for at leveraging the digital business that Jeff is building and TELUS International to buttress the economics of our wireless business in Canada. Data usage, as I indicated right now within the 4G context is up about 40% on the unlimited plans, we are seeing an average data appetite, just over five gigs and of course, I think that is going to get extenuating within the 5G construct. And lastly, as it relates to smart simplification, it is driving a strong ballistic reduction in our operating costs areas, including reduction in contract credits, inbound call volumes through the simplification and the like. And I think that bodes well for our business overall. And so I think encouragingly, what you can expect prospectively in 2020 is strong and steady performance, as we continue to migrate to the new offerings again with our characteristics, strong focus on profitability and cash flow. We expect that the continued growth in revenue network momentum through the year with ARPU - ABPU stabilization and accretion, particularly AMPU level. As we work our way through the re-rate, as we lap the launch, as we get into the third quarter or second half of 2020 and as we break the back of the migrations, which will happen within 2020. So if we can generate results like this in the re-rate period. If we can generate results like this in the migration of period, I think the second half in particular of 2020 looks very attractive indeed in that regard. And again, I would encourage you not just to look at ARPU and ABPU stabilization and network revenue growth, but what it means at the AMPU level because of the simplification characteristics of our peace of mind plan and device financing and family discounts. And of course, once again as you relate to the economics of our business holistically, we are seeing a highly differentiated level of retention to accompany what we are generating on a per client basis, at the ABPU level, generating lifetime revenue results that are 45% to 70% better than our peer group. And I think that bodes well for this organization prospectively. Doug, over to you.

Yes. And on the segmentation front, we have been disclosing for multiple years now, the convergence that was occurring within wireline and wireless. And that is not just networks, so network is probably the more obvious one and especially as we get into 5G delivering high speed broadband at speeds that are not far off each other, if not identical, allow you to deliver the service in whatever medium you feel fit for in that region. But as you looked as well, and we have been talking for years as well on how do we continue to integrate our multiproduct within homes. And we start marketing and looking at even our new enhanced, I guess security offerings with the ADT acquisition, wireless and security have definitely synergies that go hand-in-hand. Wireless and Health have definitely synergies that go hand-in-hand. And so as we look forward, we will absolutely be marketing and changing or enhancing the multi-product opportunity that we have through both wire line and wireless that it becomes in essence one product set as we look forward. As mentioned though, we will still be reporting some of those items that you referred to. So, top line revenue on a product reporting basis for internet versus wireless will still be an opportunity and still be disclosed. So we will still show net ads, we will show data versus wireless revenue on the wireline side, down to probably more of a margin or gross margin level versus rate right to EBITDA. And so you will still have a leading indicators of where our growth is coming from and the type of margins to expect because of that. And then we will definitely drive synergies between the G&A levels, which are substantially shared today.

Thank you

Next question please Mike.

Yes. The next question comes from Drew McReynolds from RBC. Please go ahead.

Thanks very much. Two questions from me. First, maybe for you Doug, on the 2020 guidance, we are all getting some questions on what is organic versus acquisition related. Are you able to unpack that at whatever level you are comfortable with on that? And just a point of clarification on the ADT Canada margin, what kind of margin would be considered a normal margin just for modeling purposes. And lastly, perhaps for you, Francoise we have got pretty good detail here on TELUS International would love to hear what the outlook is here for TELUS Health looking into 2020? Thank you.

So on your first one, we haven’t broken out the organic versus not. I think highlighting the pension and regulatory impact is showing that differential, I think you can take the trajectory of all of our assets are continuing to grow and all of our assets are very strong on that front as we have talked about in the past. I think, when you get to the ADT margin, I think you would assume it would be margins in the wireline zone, so in and that zone is being a normal, but it will be definitely substantially lower than that in 2020.

Thank you Drew, Francois here. On the health side of things, I have offered a following three points. So first I would say that we continue to expect Health to be a very exciting area of growth for TELUS. This is on the back of an increasing emphasis on chronic disease management. The enhanced focus that we are seeing on marketplace from both consumers and employers alike analyzing wellness and the benefits of our leaning network and innovative technology can deliver in terms of efficiency and effectiveness within the healthcare sector. Second, I would say as the leader in the Canadian market, we are really in a unique position when you look at the breadth of assets that we have from electronic, medical and health records, pharmacy management systems, employer health offerings, consumer health offering, benefits management for insurers and extended healthcare providers and platforms like Canada’s electronic prescription service. In addition, we have now increased our reach to include business-to-business virtual care enabled by Medisys and Adera. These two acquisitions with the launch of Babylon by TELUS Health in March of last year are giving us and consumers and employees access to convenient professional care that is alleviating the burden on walking clinics and emergency rooms and helping over five million Canadians without a doctor today. Our fast growing consumer health business is also enabling us to have more touch point, productions tumors in terms of expanding our bundled services for mobility, internet, TV, home phone, smart security and home automation to now include virtual care and personal medical alert services. And finally, in terms of financial we have seen in 2019 our revenue from our health verticals witnessed strong growth, we are reaching now almost $800 million and as a reminder, this is on the back of our health solutions which make up the majority of this portfolio and the remainder being the broadband services we offer to our B2B health lines. Within health solutions our EBITDA achieved double-digit growth in 2019 with improving margins that continues to support our broader long-term goal to deliver 35% and more our wireline business in terms of margin. And finally when you look at 2019, I think we are going to continue on the same trend of double-digit both on the revenue side and EBITDA in terms of growth for 2019 as we scale our business through organic growth partnerships and acquisitions, TELUS Health is well positioned and will be a meaningful contributor to our consolidated financial and operational performance.

That is great. And as well I appreciate the color. Thank you.

Alright. Next question comes from Vince Valentini from TD Securities. Please go ahead.

Thanks very much. So, first the new segmentation, I assume you are going to give us restated numbers for 2019 and hopefully 2018 even on the new basis. So we can build a model and compare. Do you know when we will get those?

We are planning to do it 2019 for sure. I’m not sure about 2018, but we will take that away. And it will be before we launch. So you will have adequate time to read in your models.

But not actually day or two, you are two you are talking closer to Q1 release.

Yes. It is not in the next day or two. It will be months.

And when you say the TELUS International segment, is that just tells TELUS International, the 62% owned entity or is there any other 100% owned TELUS operations that get included in there?

It is just TI.

So healthcare is still within fixed revenue for now.

That is correct.

Okay. And bigger venture questions. just on ARPU in service revenue trends, correct me if I’m wrong. Maybe probably for you Darren, on the Q3 call, thought I heard you guys talking about being gradual with the movement to unlimited plans and easing off of the overage revenue at a more moderated base than one of your competitors. Your commentary today seems as adjusted by Q3 of this year, you will have lapped most of the migration cycle and start to get back to favorable year-over-year comparisons on total ARPU and an implied overage revenue impacts, is that the case? Is the average revenue going away a bit faster than what you may have - thinking on the Q3 call?

No. I think that would be an erroneous conclusion Vince. I think it is not going away faster. The key takeaway on overage is that our exposure on overage is de minimis. And we are basically in the position now where we have broken the back of that particular challenge. The comments that we are making related to the 2020 really just has two components. One is we will get a year-over-year obvious lapping benefit as we get into the Q3 period of 2019, I have given the launch of peace of mind at the start of Q3 in 2018 or 2019 rather. And then of course, we will have broken the back of the migration challenge over the course of 2020, which will expose us to greater and greater economic accretion that you will see in terms of expansion at the network revenue level and stability and accretion as it relates to our ABPU and AMPU economics and an increased improvement in overall profitability as a result of that particularly with the amplification of data growth within the 5G construct. I felt it was important to talk about the fact that we are seeing fewer step downs, talk about what progress we have made as it relates to the unrecoverable subsidy component, which is going to be an increasing economic contributor for us. And as well, the significant data growth that we are seeing, averaging out now, over the five gig level. And in particular cost efficiency, cost efficiency and cost efficiency as we have been significantly simplified our wireless business model in this regard in a way that fits very well with customer expectations that are out there from quality service through to affordability constructs. The other thing I think it is important is that we are not saying that this is all on the come, post the lapping and post breaking the back of the migrations, what we are seeing is, we will deliver strong results pre the lapping. So, we will deliver that and I think these results reflect that and we can deliver strong results through the migration period. And I wanted to emphasize that particular component and if you go back and have a look at a wireless cash EBITDA construct for Q4, we almost hit 8% on wireless cash EBITDA growth for the quarter and for the full-year, we are in the Circa 7% zone. So, I think that is pretty good going overall, as we are in a transitional periods. And then lastly is the free cash flow storage component when you look at improving economics, both in terms of profitable top-line but flow through to the EBITDA line in both our wireless and our wireline operations when you look at the increasing contributions from TI at the EBITDA level and complement that with a moderated capital appetite. I think we have got a strong free cash flow story not just for 2020 at greater than 80%, including taxes and 33% excluding taxes, but a propagation of that story, in terms of chronic strong growth in cash beyond the 2020 because of the EBITDA growth compliment against the moderating capital appetite and seeing that growth coming from wireless, wireline and TI. And so that is really the comments in terms of the ARPU, ABPU, AMPU flow through to the overall a wireless economics complimenting that with wireline and TI.

Okay. thanks for that. And last one, Doug for you. It looks like EPS guidance is not on your list this year. But can you give any color on that metric, last year EBITDA growth was good but G&A expense went up by almost as much, so EPS only went up a penny, do some of this better EBITDA and free cash flow growth in 2020 translate into better EPS growth as well?

We didn’t have that in our projection at the moment. We did disclose depreciation and amortization though in our assumption and so maybe we will just take that off and get back to you on the exact or rough measure.

The alignment there Vince was just really relying with the industry in terms of expectations that they are setting with the street, having drifted from EPS to cash flow. And so we thought that was appropriate. And then secondly, given the dividend growth model is such a big component of the TELUS story. The fact that we are doing the dividend payout ratio range as a percentage of cash flow at the 60% to 75% zone, and talking about the type of dividend accretion that we want to deliver over the next three years. We thought that was a better metric construct to guide the street towards.

Thanks Vince. Next question please Mike.

Alright. Next question comes from Aravinda Galappatthige from Canaccord Genuity. Please go ahead.

Thanks for taking my questions. Two from me. The first Darren on 5G. I was wondering, if you can kind of generally provide a roadmap from here on. Obviously you have talked a lot about the significance of fiber there and we have a sense of the spectrum options. But when you think about radio equipment, when you think about the transformation of the core network and the upgrades that are required there. Can you give us a sense of what is the sort of the milestones are from here on and the timeline? And then secondly, with respect to TELUS International, I was wondering if you can talk to sort of the revenue mix there thinking about the mix of digital or call IT type services, arguably the high growth segments within that. Are you satisfied with that - so do that you think that needs to progress a little bit more before sort of moving ahead to sort of an IPO stage call it. Thanks very much.

Progressing that particular digital metric for TI is the essence of the TI story and I will hand over to Jeff to talk about that in a minute. I’m not going to preannounce our 5G launch plans for competitive reasons. I think it is important to kind of convey the mentality of TELUS, which has consistently been a etiology that says to us “let’s focus on getting the execution right from day one, and then let’s couple that with the announcement” and it really is the way that we operate. So when we launch 5G from a network readiness to device availability to see accretion, then the press release will go out that morning. So clearly this is something that we are going to do in 2020. I’m just not going to step beyond that from a specificity point of view. But when we do it, we want to make sure that we can offer an experience where the network speeds are distinctly better than our globally leading industry speeds on LTE advanced pro, leveraging the advent of the first foray on the network technology up front and you can look for greater specificity and definition in that regard, in the months to come from this organization. As it relates to what is really an excellent question that you are asking. I think it is important to guide this street that the progression on 5G is not a sprint, but rather a marathon. And some of the most meaningful capabilities that relate the 5G are going to emerge gradually and sequentially as larger channels of key 5G eco-systems spectrum comes available most obviously 3.5 gigahertz and millimeter wave spectrum. Also as that spectrum ability takes place within large channels swab we are going to be of course, building on our core 5G network architecture that importantly, there is not a lot of discussion of this, but importantly that is coupled with our edge computing deployment within that world. And leveraging our deep and pervasive fiber infrastructure that of course within the 5G world is a paramount importance as it does the front haul delivery and back haul redistribution of the wireless 5G traffic. And then finally, you know, I think what has been a nice critical differentiator for TELUS as we progress from 2G to 3G to 4G to 5G is our next generation network sharing framework that allows us to execute new technology deployment at a level of speed, at a level of pervasiveness and an a level of cost efficiency that is a competitive advantage for this organization. It has been historically and I would say the past will be prescient in that regard. So that lead key components that I would draw out in terms of the roadmap is watch for key spectrum coming available, really the global ecosystem on 5G is at the 3.5 gigahertz level and the channels are getting larger and you need that as it relates to speed and latency consideration. The same is true on millimeter wave, particularly with millimeter wave being used as an alternative access mechanism on point-to-points, wireless access connectivity to compliment our broadband fiber expansion that we have been undertaking. Look for interesting developments in 5G network architecture and the distribution to the edge of our computing power, processing power in that regard. And always think about wireless in combination with fiber and how those two things set you up for competitive success prospectively. It is also important to begin having a better dialogue and I don’t think we have done a good enough job in this regard as it relates to 5G potency and pervasiveness of being critical for Canada’s economy and society. Our industry is not really a vertical, it is more of a horizontal underpinning both the private sector and of course Canadian society in a larger context and 5G is going to drive significant improvement as it relates to productivity, innovation, efficiency and importantly digital transformation and the huge data swaps that are going to be using that wide band capability are going to give both businesses and societal considerations, the ability to leverage dynamic insights within an artificial intelligence world. And if we can do that, not just in the private sector, but support what we want to do on health and education and the environment and bridging social economic, digital device, I think that is going to be a great thing. And really the master for us, and this is important, because at TELUS this is endogenous. It is an Axiom within the organization. As we progress into 5G, we want to still be obviously the global leader in wireless technology and we don’t intend to yield that distinction. It is important to our company as it is to our country and we are going to be extremely thoughtful as we progress through the roadmap that I just shared with you and as we enjoy those benefits in terms of speed, reach and latency and considerations and all the applications that 5G will enable. Jeff over to you.

So on the mix of revenue in TI, there is no doubt that we want to continue to evolve and increase the native digital nature of our service revenue. But I think as more visibility is provided in connection with our business, anticipate some pleasant surprises in terms of how much progress we have already made on that front. Already sub 30% of our revenues derived from legacy voice-based customer care services, we are already well evolved to North of 50% of our business being digital centric, whether it is proprietary AI platform, building bots both transactional and informational for our customers and for ourselves, providing big data analytic solutions, helping move our customers from legacy premise-based applications to the cloud. We have got literally hundreds of bots and RPA solutions that we have been deploying for our customers and for ourselves and are continuing to evolve our business mix, so that we can take advantage of these macro transformational dynamics that are taking place in terms of digital adoption really end-to-end. Unlike some of our peers though that we don’t anticipate legacy human assisted care disappearing. But rather we take a more a bifurcated approach where we see digital bias as a copilot to our highly trained, highly skilled human population being capable of real time interacting with technology and NextGen solutions to provide the best possible experience for end user community. And the relationship with TELUS has really been sort of the Genesis of our thinking in this regard and we get a test drive if you will, and pilot these solutions on behalf of our parent company and then take those solutions to market when they have been hardened with a pretty exciting reference able customer to endorse the success that we are having.

Thank you.

Darren, I will hand it over to you for any final remarks before we wrap up the call.

Thanks Robert. Just some color in terms of guidance for 2020. And I think what the investment community should look forward from us. On the strategy front more of the same with amplified execution that is going to deliver amplified results in 2020, over 2019. I think you can expect to see a strong performance from all three of our assets, wireless, wireline and TI and some very interesting developments within the emerging areas for us at Health and AgTech. It is going to be a continued focus on profitable subscriber growth. And I would look for TELUS to deliver robust and profitable and significant customer expansion in 2020. Doing that by leveraging both our network assets and our customer service excellence, but also leveraging what become a growing portfolio of new services at TELUS that is yielding that profitable subscriber growth. We have got new services on the health front, we have got exciting new services on the security front, we have got great new services as it relates to IoT that will be at a premium if 5G comes to fruition. And we will also see new services on the B2B front as we leverage solutions like software defined out wide area networks. I think you can look for us to deliver improving network revenue growth throughout 2020, AMPU, ARPU stabilizations to an accretion base that we go through as we digest the are-rate as we laugh at the launch of unlimited, as we break the back of the migration and we move from strong transition based results to very accretive forward looking results in that regard and see it reflected in our key KPIs on the network revenue level and the AMPU, ARPU level. I think you can look from very strong organic performance coming out of both TI and TELUS Health as Jeff and Francois had the opportunity to allude to. I think a story that is a little bit muffled within TELUS is the turnaround within our B2B wireline business, that has been diluted to our adjusted EBITDA results for five consecutive years. We are looking to get to EBITDA, neutral and EBITDA accretive 2020 as it relates to our B2B of wireline business and I think that is a nice attribute of our economic growth prospects going forward. We are going to get a clear top-line benefit from ADT and CCC, but I would caution you as it relates to ADT let’s be a little bit conservative about this. TELUS is here to stress out that when we bought ADT. We bought it at a reasonable price, we have got work to do to invest in that asset and to turn it around, that will mitigate its economic contribution in 2020. But will set up a strong economic contribution in 2021 and beyond, as we significantly scaled our security business and as we harvest security efficiencies by bringing that particular asset portfolio into a harmonized state. We are excited as Jeff said about CCC as it relates to revenue growth and EBITDA margin expansion, coming from that business. And then lastly, maybe to conclude, we are obviously not taking our eye off the ball as it relates to efficiency and effectiveness at the TELUS corporate level. So, on the efficiency front, always, always, always be in front of mind, whether it is wireline, whether it is wireless or even within Jeff’s emerging area on the TI front, we have upped our restructuring investments to 150 million, we think it is the right thing to do to invest in those efficiencies. And we will be driving significant J curves that I think are going to yield future growth again, in the ADT area, in the B2B area and in the emerging hi-tech business that I think will provide long-term great economics, great diversification and it is all leveraging our telecom technology and 5G and fiber capabilities in a very meaningful way. So, thanks for your support. Appreciate it.

Thank you, Darren. And thank you everyone for taking the time to join us today. Please free reach out to the IR team for any follow-up questions. Mike back over to you.

Ladies and gentlemen, this concludes the TELUS 2019 Q4 earnings conference call. Thank you for your participation and have a nice day.